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ADB projects India's GDP to grow 6.9% in FY27, 7.3% in FY28
Apr-10-2026

Despite a worsening global economic and geopolitical environment, Asian Development Bank (ADB), in its Asian Development Outlook report, has said that India's Gross Domestic Product (GDP) growth is projected to grow by 6.9 per cent in the current fiscal (FY27), and rise to 7.3 per cent in the following fiscal (FY28). It said growth will be underpinned by strong domestic demand, easing financing conditions and lower US tariffs on Indian goods. However, it warned that prolonged geopolitical tensions in West Asia could undermine India's macroeconomic performance through multiple channels. These include higher energy prices, disruptions to trade flows, and weaker remittance inflows given the region's continued importance for India's external sector. 

ADB said India's real GDP growth for FY26 is estimated at 7.6 per cent, higher than the 7.1 per cent recorded in FY25, supported by resilient household consumption due to cut in income tax, GST, and falling food prices, besides steady public investment. It projected that retail inflation in India will more than double to 4.5% in FY27 from 2.1% in FY26 due to a rebound in food prices from earlier declines, higher global oil prices, currency weakness, and rising precious metal prices. It said Inflation is projected to ease back to 4% in FY28 on account of lower oil prices. 

It said although rising inflation, especially food and petroleum products, may temper private consumption in the current fiscal, GDP growth in next fiscal would see marked improvement as domestic demand strengthens due to hikes in salaries/pensions of government employees and an uptick in investment benefitting from key regulatory reforms. It said external demand is expected to strengthen as the benefits from the trade deal with the European Union (EU) boosts exports.


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