Major international institutions including the OECD, Asian Development Bank, S&P Global Ratings and Fitch have raised their forecasts for India’s 2027 GDP, citing robust domestic demand and steady investment despite external challenges.
India’s growth outlook has been lifted again by several major international institutions, reinforcing the view that the economy is holding up better than many expected despite external headwinds. The Asian Development Bank, the OECD, S&P Global Ratings and Fitch Ratings have all raised their forecasts for fiscal 2027, pointing to resilient domestic demand, steady public spending and firmer investment sentiment as the main supports.
The OECD offered the most optimistic assessment, increasing its FY27 forecast to 7.1% from 6.3% in June. The Asian Development Bank followed by raising its estimate to 7% from 6.6%, while S&P Global Ratings also moved to 7% from 6.6%. Fitch Ratings upgraded its projection to 6.9% from 6.4%. Taken together, the revisions keep India at the top of the growth table among large economies, a position that reflects both strong local demand and the country’s ability to absorb some of the strain from a more unsettled global environment.
The upgrades come after India’s economy expanded by 7.8% in the June quarter, a stronger-than-expected result driven by investment demand, consumption and broad-based growth across manufacturing and services. High-frequency data have continued to point to solid momentum. Gross fixed capital formation rose 11.9% in the first quarter of FY27, corporate sales grew 21.3% and exports increased 15.9%, suggesting that the recovery is being carried by more than one sector. Purchasing managers’ surveys also showed activity strengthening in September, with the manufacturing index rising to a seven-month high of 55.7 and the services gauge climbing to 55.8.
According to Mio Oka, the Asian Development Bank’s country director for India, the economy has remained resilient despite supply disruptions and elevated commodity prices linked to the conflict in West Asia. Oka said strong infrastructure spending and supportive fiscal and monetary policies have helped cushion the impact. The bank also expects services to remain a key driver, including activity linked to artificial intelligence, along with better agricultural productivity and steady manufacturing growth. It sees domestic demand as the main engine of growth in FY27 and FY28, helped by robust tax collections, low interest rates, rising household incomes and the planned revision of government salaries and pensions in FY28.
Even so, the outlook is not without risks. The ADB cited prolonged geopolitical tensions and El Niño-related disruptions as potential threats, while the OECD warned that weaker purchasing power could slow growth in the second half of this year before conditions improve in 2027. Inflation remains within the Reserve Bank of India’s target band, but price pressures are edging higher. Retail inflation rose to 4.8% in August from 4.5% in July, and the ADB expects consumer inflation to average 5% in FY27. The OECD sees it at 4.7%, S&P at 5.1% and Fitch at 5.5% by December 2026. With inflation pressures building, S&P expects the RBI to raise rates by 25 basis points this fiscal year, and the ADB and OECD also anticipate tighter policy if prices continue to firm.
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