June 6: India’s economic growth is projected to moderate to 6.6 percent in FY27, according to a recent report, reflecting a phase of stabilisation after strong post-recovery expansion in previous years.
The report suggests that while India continues to remain one of the fastest-growing major economies globally, growth is expected to normalise as base effects fade and global economic conditions remain uncertain. External factors such as geopolitical tensions, fluctuating commodity prices, and uneven global demand are expected to influence the growth trajectory.
Despite the moderation, India’s economic outlook remains supported by strong domestic fundamentals, including resilient consumption demand, steady public investment, and ongoing infrastructure development. The services sector, along with manufacturing and digital economy expansion, is expected to continue contributing significantly to overall growth.
Economists note that the anticipated slowdown does not indicate weakness but rather a shift toward sustainable and stable growth levels after periods of accelerated expansion. India’s macroeconomic stability, controlled inflation outlook, and robust financial system are expected to provide strong support during this phase.
The report highlights that structural reforms, increased capital expenditure, and improved supply chain efficiency will continue to play a key role in maintaining growth momentum. Additionally, a young workforce and rising urbanisation are expected to support long-term economic expansion.
However, global headwinds, including slower growth in advanced economies and volatility in international financial markets, may weigh on export performance and external demand. Policymakers are expected to closely monitor these developments to ensure balanced and inclusive growth.
Experts believe that India remains well-positioned among major global economies, with its growth trajectory still significantly higher than the global average. The moderation to 6.6 percent is viewed as part of a normalisation cycle rather than a structural decline.
Overall, the outlook underscores India’s continued economic resilience and its ability to sustain steady growth amid an evolving global environment.