New Delhi
India is expected to maintain strong economic momentum with GDP growth projected at 6.6 per cent in FY27, according to a forecast by Fitch Group company BMI Research. The projection suggests India will continue to remain one of the world’s fastest-growing major economies despite global uncertainties, including geopolitical tensions in West Asia.
The estimate is in line with the Reserve Bank of India’s (RBI) own growth forecast of 6.6 per cent for 2026–27. India had recorded a robust growth rate of 7.7 per cent in FY26, supported by strong domestic demand and policy measures.
BMI noted that while growth will remain healthy, it is likely to moderate compared to the previous year due to several factors. One key reason is the fading impact of Goods and Services Tax (GST) reforms implemented in September 2025, which had previously boosted consumption. Following a temporary surge, consumption growth slowed in the March quarter of FY26.
The report also highlighted inflation as a constraint, with prices expected to rise to around 5.3 per cent in FY27. Higher inflation, partly driven by supply chain disruptions linked to tensions around the Strait of Hormuz, may weigh on household spending and economic activity.
Another factor is a potential slowdown in investment growth. However, BMI said this is not primarily due to monetary tightening, as the Reserve Bank of India had already reduced policy rates by 125 basis points during 2025, which continues to support liquidity and growth.
The report also pointed to currency movements, with the rupee expected to trade around 95 per US dollar. While depreciation may increase import costs, it could also improve export competitiveness and partially offset external shocks.
Overall, BMI said India’s growth story remains resilient, supported by strong fundamentals, even as global uncertainties and energy market volatility pose challenges in the medium term.