In its latest April 2026 South Asia Economic Update, the World Bank has upgraded India's GDP growth forecast for the fiscal year 2026-27 (FY27) to 6.6%, up from an earlier estimate of 6.3%. Despite a projected slight moderation from the 7.6% growth expected in FY26, India remains the fastest-growing major economy globally, the World Bank noted. In India, growth is estimated to have accelerated from 7.1 percent in FY25 to 7.6 percent in FY26 (April 2025'March 2026), owing to strong domestic demand and export resilience. Private consumption growth was particularly robust, supported by low inflation and rationalization of the Goods and Services Tax (GST).

Growth is projected to decelerate to 6.6 percent in FY27, reflecting headwinds from the Middle East conflict, the World Bank noted. The impact of these is highly uncertain: other forecasters have revised down their growth projections to a range between 5.9 and 6.7 percent. Although the reduction in GST rates should continue to support consumer demand in the first half of FY27, elevated global energy prices are expected to put upward pressure on prices and constrain households' disposable income. Government consumption growth is expected to soften to offset higher subsidy outlays for cooking fuel and fertilizers. Investment growth is likely to moderate amid elevated uncertainty and rising input costs. Improved access to the United States and the European Union for India's exports will be undermined by slower growth in major trading partners, it noted.