India’s economy is forecasted to expand by 6.6% in the fiscal year 2027, positioning the country as one of the fastest-growing major economies globally, as per a report by the Asian Development Bank (ADB). The ADB report emphasized that this growth projection for FY27 surpasses the International Monetary Fund’s estimate of 6.4%. The growth is anticipated to be driven by policy initiatives aimed at attracting foreign investments, tax reductions, targeted credit assistance, robust services exports, and increased public capital expenditure.
The ADB has also maintained its growth forecast for India in FY28 at 7.3%, aligning with its previous outlook from April. The report highlighted that India’s medium-term prospects are bolstered by favorable global conditions and enhanced export competitiveness facilitated by trade agreements with multiple partners. However, the report noted that the revision in the FY27 growth forecast was influenced by high energy prices, which could diminish real incomes and impact consumer spending.
Furthermore, the ADB cautioned that risks to the economic outlook are skewed towards the downside due to escalating geopolitical tensions and potential agricultural disruptions caused by adverse weather conditions. The ADB revised India’s inflation projection for FY27 to 5.2%, while maintaining the FY28 forecast at 4%. For the broader South Asian region, the ADB adjusted the growth forecast to 6.0% in 2026, down from the earlier projection of 6.3%, citing factors such as increased oil prices, escalating freight expenses, and uncertainties surrounding remittance inflows.
In the context of developing Asia and the Pacific, the ADB reduced its 2026 growth forecast to 4.9% from the previous 5.1%, attributing this adjustment to the prolonged conflicts in West Asia disrupting energy supplies and supply chains, consequently elevating production costs and hindering economic activities. Despite immediate challenges, the ADB affirmed that India’s growth trajectory remains robust on a global scale, supported by continuous reforms, public investments, and resilient services exports.
