India's GDP to grow 7.1-7.3% in FY27: Deloitte

India's economy is forecasted to grow by 7.1-7.3% in the current fiscal year (FY27), according to Deloitte India's latest Economic Outlook. This growth is attributed to strong domestic consumption, public infrastructure spending, and a potential recovery in private investment. However, the growth is expected to slow down to 6.6-7.0% in FY28. Deloitte warns that geopolitical tensions, changes in energy prices, and disruptions to global trade could negatively impact India's economic prospects.

The company points out that improving corporate balance sheets, increased capacity utilization, and better infrastructure connectivity have created a favorable environment for businesses to boost their capital expenditure. This could further contribute to India's economic growth. Private investment has become a crucial factor in sustaining economic momentum as household consumption and government-led infrastructure spending have been the main drivers in previous years.

Recent data shows that gross fixed capital formation grew by 11.9% in the first quarter of FY 2026-27, marking the fastest expansion in four years. Deloitte economist Rumki Majumdar highlights the potential of sectors like semiconductors, electronics, defense manufacturing, clean energy, and artificial intelligence infrastructure to accelerate private capital expenditure. These industries require significant initial investments and could help expand India's productive capacity in the long run.

The growth forecast by Deloitte aligns with estimates from other major institutions, including the Reserve Bank of India (RBI), the Organisation for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF), the Asian Development Bank (ADB), S&P Global Ratings, and Moody's, which all project a GDP growth of around 7% for FY27.

However, the report emphasizes that a durable recovery in private investment is crucial to strengthening domestic demand and supporting future economic expansion, especially in the face of uncertainties surrounding global trade and energy markets.