India's GDP growth projected to ease to 7.1% in FY27 amid global uncertainty: CRISIL
&imwidth=600&imheight=450&format=webp&quality=medium "India's GDP growth projected to ease to 7.1% in FY27 amid global uncertainty: CRISIL")
Representative image. Photograph: (Pexels)
The forecast of India's GDP is based on four key assumptions: a normal monsoon, manageable food inflation despite a low-base effect, Brent crude prices hovering around $75–$80 per barrel, and stable global economic growth.
The real gross domestic product (GDP) growth of India may slow down to 7.1 per cent in fiscal 2027, compared with 7.6 per cent in the previous year, according to a report by Crisil Intelligence. The outlook, shared during the 10th India Outlook Conclave, suggests that growth will remain strong even as the global environment faces challenges such as geopolitical tensions and increasing protectionist policies. In addition, domestic demand is expected to remain the main driver of expansion, supported by solid consumption and a gradually strengthening cycle of private investment.
The forecast is based on four key assumptions: a normal monsoon, manageable food inflation despite a low-base effect, Brent crude prices hovering around $75–$80 per barrel, and stable global economic growth. While government spending on infrastructure, estimated at around 3.1 per cent of GDP, continues to play a major role, private investment is also gaining traction, particularly in emerging sectors such as electronics, semiconductors and electric vehicles.
Amish Mehta, Managing Director and CEO, Crisil, told news agency ANI, "India has grown steadily in an environment buffeted by exogenous uncertainties. Our fiscal 2027 forecast reflects its strong domestic counterweights, especially consumption, infrastructure capex, an uptick in the private investment cycle led by emerging sectors, and gradually improving trade competitiveness. However, continuing geopolitical conflicts, the proliferation of technology-driven disruptions, public debt levels and climate vagaries will need close monitoring."
Private consumption remains the main pillar of the economy
Private consumption, which makes up nearly 57 per cent of India’s GDP, remains the main pillar supporting the economy, although its growth may slow as temporary tax benefits begin to fade. Consumer Price Index (CPI) inflation is expected to rise to about 4.3 per cent as food prices stabilise, but the reduced share of food items in the new 2024 base-year inflation index is likely to keep overall price pressures under control.
Industries such as automobiles, consumer durables, and hospitality are projected to perform strongly, driven by improved affordability and long-term structural shifts, including rising incomes and greater participation of women in the workforce.
Trending Stories
)
&im=FitAndFill=(700,400))
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
&im=FitAndFill=(700,400))
)
)
&im=FitAndFill=(700,400))
)
)
)
&im=FitAndFill=(700,400))
&im=FitAndFill=(700,400))
)
)
)
Dharmakirti Joshi, Chief Economist, Crisil, said, "Domestic demand is expected to stay supportive in fiscal 2027, with fiscal measures lifting disposable incomes and private investment seeing a mild pick-up. That said, risks remain tilted to the downside, given renewed geopolitical flare-ups and lingering trade-related uncertainty that can transmit through commodity prices, trade and capital flows."
Meanwhile, industrial capital expenditure is expected to increase significantly, with annual investments projected to reach around Rs 9.1 lakh crore between fiscals 2027 and 2031, marking roughly a 1.5-times jump. Much of this expansion will come from emerging sectors: semiconductor and electronics manufacturing could grow 4.7 times, while electric vehicle production and charging infrastructure may expand by about 3.1 times.
