S&P Global raises India’s FY27 growth outlook to 7.1%

In a positive signal for Asia’s third-largest economy, S&P Global on Wednesday revised India’s GDP growth forecast for FY27 upward by 40 basis points to 7.1%, citing resilient domestic demand, a gradual pickup in private investment, and steady export performance.In its latest quarterly economic outlook for the Asia-Pacific region, the ratings agency said India’s growth is expected to moderate slightly from 7.6% in FY26 to 7.1% in FY27, while remaining among the fastest-growing major economies globally. “Key drivers are resilient private consumption, a modest recovery in private investment, and solid exports,” the report noted.The upward revision marks an improvement from its previous estimate of 6.7% for FY27, reflecting stronger-than-anticipated economic momentum.
Risks from Global Uncertainty Persist
However, S&P Global cautioned that downside risks continue to loom, particularly due to escalating geopolitical tensions in West Asia and ongoing trade-related uncertainties.
“These risks could affect India through fluctuations in commodity prices, trade volumes, and capital flows,” the agency said, highlighting the vulnerability of emerging markets to external shocks.
Medium-Term Growth Outlook Strengthens
Looking ahead, the agency also upgraded its projections for the following years, raising FY28 growth by 20 basis points to 7.2% and FY29 to 7.0%, indicating confidence in India’s medium-term expansion trajectory.Official estimates released by the Ministry of Statistics and Programme Implementation peg India’s GDP growth at 7.6% for the current fiscal. Meanwhile, the government’s Economic Survey has projected FY27 growth in the range of 7.0% to 7.4%.
Inflation and Policy Outlook
On inflation, S&P Global expects retail inflation to rise to 4.3% in FY27 as price pressures normalize from lower levels. Higher global crude oil prices are likely to push up domestic fuel costs, although the government may step in to limit full pass-through to consumers.The report added that the Reserve Bank of India may adopt a cautious stance in response to energy-driven inflation. “We would expect one 25 basis point rate hike in the second half,” it said, while broadly anticipating that the central bank will maintain a neutral policy stance.Higher oil prices could widen India’s trade deficit, but a strong surplus in services exports is expected to help contain the current account gap.
Global Growth Holds Firm
On the global front, S&P Global noted that economic activity remains resilient despite geopolitical tensions. Strong investment in artificial intelligence-driven technologies, particularly in the United States, along with supportive fiscal and monetary policies in major economies, has underpinned global growth.However, the agency warned that relief from US tariffs may be short-lived. It expects Washington to reintroduce country- and sector-specific tariffs under provisions such as Section 301 of the Trade Act, citing concerns over unfair trade practices and national security.
Outlook
While India’s growth outlook remains robust, supported by domestic demand and improving investment activity, external risks ranging from geopolitical conflicts to evolving global trade policies are likely to shape the trajectory in the coming years.

(Business Correspondent)