S&P Global Ratings raised India’s GDP growth forecast for fiscal year 2027 (FY27) to 7% on September 23, 2026, up from the previous estimate of 6.6%. The upgrade reflects stronger-than-expected economic activity, driven by robust consumption, industrial output, goods exports, and government investment.
The ratings agency also expects the Reserve Bank of India (RBI) to implement a 25-basis-point rate hike during FY27, citing persistent inflation pressures and strong growth momentum. India recorded 7.8% growth in the June quarter, supporting the upward revision.
S&P forecasts consumer inflation to average 5.1% in FY27, which could influence the RBI’s monetary policy. The agency noted that the balance of considerations is shifting toward higher interest rates, with risks from West Asia tensions and weather conditions adding to the outlook.
Weather remains a concern, as cumulative rainfall stood 15% below normal through early September, potentially pressuring agricultural output and food inflation. Higher energy prices could further strain the rupee and inflation.
The latest S&P forecast is above the RBI’s own projection of 6.7% and Fitch Ratings’ estimate of 6.4%, but aligns with Moody’s expectation of 7% growth for India in FY27. Looking ahead, S&P expects India’s growth to reach 7.2% in FY28 before easing to 7% in FY29, with domestic consumption and investment remaining central to the trajectory.