India GDP growth FY27 is projected to remain strong at between 6.8% and 7.2%, according to the Economic Survey for 2025–26 released by the Union Ministry of Finance on Thursday. The forecast reflects the government’s confidence that domestic reforms and resilient demand will help the economy withstand mounting global trade uncertainties.
The survey said India’s economy could expand at more than 7% in 2026–27, maintaining its position as the world’s fastest-growing major economy despite external risks, including steep US tariffs on Indian exports. For FY26, the government estimates growth at 7.4%, driven largely by consumption and investment.
“The cumulative impact of policy reforms over recent years appears to have lifted the economy’s medium-term growth potential closer to 7%,” the Economic Survey noted. It added that while global uncertainty calls for caution, the overall outlook remains one of steady and sustainable growth.
India’s growth projection is more optimistic than current market expectations and forecasts from multilateral agencies. The International Monetary Fund has pegged India’s FY27 growth at 6.2% if elevated trade barriers persist.
Reforms Powering Growth Amid Trade Risks
The government highlighted a series of structural reforms aimed at cushioning the economy from external shocks, particularly the impact of US tariffs and the absence of a bilateral trade deal with Washington.
Among the key measures cited in the survey:
- A major cut in GST rates in September on hundreds of items, marking the biggest indirect tax reform since GST was rolled out in 2017.
- Consolidation of numerous labour laws into four labour codes to simplify hiring and employment norms.
- Signing of four free trade agreements since May, including a long-pending pact with the European Union.
- A cumulative 125 basis point cut in the repo rate by the Reserve Bank of India since April 2025 to support investment growth.
The survey also pointed to favorable domestic conditions, including low inflation, healthier balance sheets for households and firms, and resilient consumer demand. “These conditions provide resilience against external shocks and support the continuation of growth momentum.
Outlook Remains Cautiously Optimistic
Despite the upbeat projections, economists caution that reforms may not fully offset losses linked to prolonged trade tensions with the United States, where tariffs on Indian exports remain as high as 50%. India is one of the few major economies yet to conclude a trade agreement with Washington.
However, the government struck an optimistic note, stating that ongoing trade negotiations with the US are expected to conclude during the year, potentially easing uncertainty on the external front and supporting growth momentum in FY27.