Media365
India’s economic growth is expected to slow sharply in FY2026-27 as weak private investment and elevated crude oil prices dampen domestic demand, according to a Reuters poll of economists.
The survey projects India’s GDP growth at 6.6 per cent in the current fiscal year, down from an estimated 7.7 per cent in FY2025-26. Growth is expected to recover only modestly to 6.8 per cent in FY2027-28, indicating that Asia’s third-largest economy could face a prolonged period of softer expansion.
Despite strong corporate balance sheets, private investment is yet to gather sustained momentum as companies remain cautious about committing to large capital expenditure plans amid uncertainty over demand. Economists believe the economy continues to rely heavily on government spending to support growth, while concerns persist over the pace of private sector-led expansion.
The outlook has also been clouded by higher global crude oil prices following the Iran conflict. As India imports nearly 90 per cent of its crude oil, sustained increases in energy prices could raise fuel and transportation costs, adding pressure on inflation while weakening household consumption.
The combination of slowing growth and rising inflation risks is expected to keep the Reserve Bank of India on hold at its August monetary policy meeting, with policymakers likely to prioritise inflation management while assessing the impact of higher oil prices on the economy.
The Reuters poll, conducted between July 21 and July 27, surveyed 42 economists and suggests that global uncertainties, softer domestic demand, and cautious corporate investment could remain key headwinds for India’s growth over the next two fiscal years.
