New Delhi: India’s economy is projected to grow at a robust 7% in the fiscal year 2026-27, underpinned by strong macroeconomic fundamentals and resilient domestic demand, according to a latest outlook by CareEdge Ratings. This optimistic forecast comes as global economic conditions remain volatile due to trade tensions, slowing global growth, and rising policy uncertainty.
The report highlights that India’s real GDP expanded by an estimated 7.4% in the current fiscal year (FY 2025‑26), supported by fiscal stimulus measures such as income tax cuts, rationalized goods and services tax (GST) slabs, and accommodative monetary policy by the Reserve Bank of India (RBI).
Key domestic drivers — including resilient services exports, sustained private consumption, and capital expenditure revival — have helped India maintain momentum even as global demand softens. Further, foreign exchange reserves climbed, offering additional buffers against external shocks.
Despite a weaker external environment, inflation has hovered near the RBI’s comfort band, allowing monetary authorities to keep real interest rates supportive without stoking price pressures.
Industry bodies have underscored the role of structural reforms and public investment in maintaining growth. The Confederation of Indian Industry (CII) has urged the upcoming Union Budget to prioritize infrastructure, research and development, and digital transformation to sustain momentum.
While domestic performance has been strong, some headwinds persist. Foreign portfolio investors (FPIs) remained net sellers in equity markets in January 2026, withdrawing over ₹22,500 crore amid global volatility — underscoring the sensitivity of market flows to external cues.
Economists also point to lingering risks from currency fluctuations and tariff barriers that could temper export growth if global conditions deteriorate further.
Amid a challenging global backdrop — where advanced economies grapple with slowing growth and tightening financial conditions — India stands out as a relative beacon of growth. International agencies have repeatedly noted India’s ability to outperform peers, driven by lower trade dependency and strong domestic demand.