The World Bank has revised India’s growth outlook for 2026-27 upward to 7.1%, highlighting strong domestic demand and exports despite global uncertainties, as structural reforms bolster resilience.
The World Bank has raised India’s growth forecast for fiscal 2026-27 to 7.1%, up from 6.6%, saying the economy continues to benefit from firm domestic demand and strong exports even as the global outlook remains uncertain. In its latest South Asia Economic Update, the multilateral lender said India remains one of the world’s fastest-growing large economies and an important driver of global expansion.
The revision reflects expectations that industrial activity and services will stay resilient, with broader economic strength helping to offset softness in agriculture. The World Bank said the country’s growth prospects are supported by a series of structural changes, including labour code consolidation, goods and services tax reforms, tariff adjustments, insolvency reforms and ongoing infrastructure investment in both the physical and digital economy.
At the same time, the lender warned that the outlook is not without risk. It pointed to higher global oil prices, possible El Niño-related weather disruptions and market corrections that could unsettle capital flows. The World Bank also said a wider monsoon deficit than first expected could weigh on farm output, rural spending and food inflation, adding to pressure from energy costs.
Looking further ahead, the World Bank sees growth easing in the second half of fiscal 2026-27 before improving over the medium term. It projected expansion of 7.2% in fiscal 2027-28 and an average of 7.1% in fiscal 2028-29, with inflation easing and the current account deficit narrowing as energy markets normalise. The bank also lifted its South Asia growth outlook to 6.9% for 2026 and 6.7% for 2027, underscoring India’s continuing role as the region’s main growth engine. India’s economy expanded 7.8% in fiscal 2025-26, according to the World Bank.
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