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On January 12, 2022, workers worked at the construction site of the Mumbai Coastal Highway Project.
Puneet Paranipet | AFP | Getty Images
India expects economic growth in fiscal 2027 to be between 6.8% and 7.2%, surpassing most major economies.
India’s finance ministry said in the FY26 Economic Survey that the world’s fourth-largest economy aims to achieve this growth on the back of domestic economic stability and reduced external uncertainty as it aims to seal a trade deal with the United States “this year”.
The International Monetary Fund predicts that India will remain the fastest-growing economy in the world, with economic growth expected to be 6.4% in 2026 and 2027. In contrast, the International Monetary Fund predicts that the world economy will grow by 3.3% in 2026 and shrink slightly to 3.2% in 2027. Major economies such as Germany, the UK and Japan are likely to grow in the low single digits.
The report said that the outlook for the Indian economy in the next fiscal year is “stable growth amid global uncertainty, which requires caution but not pessimism.”
unaffected growth
It is reported earlier This month, India’s economy is expected to grow 7.4% in the fiscal year ending in March 2026, up from 6.5% growth in the previous fiscal year.
India’s exports to the U.S. since August with tariffs More than 50%, and although negotiations are ongoing, an agreement is still far away.
But economic surveys show India’s economic growth has not been hampered by slowing exports to the United States
India’s major exports include textiles, seafood, gems and jewellery, auto parts and leather goods. artificial Because of U.S. tariffs. But according to data shared by the Indian government, these products have found alternative markets.
India’s seafood products are now sold to countries such as China and Malaysia, while the country’s auto parts exports to the United Arab Emirates are also increasing, the report said.
Despite the tariff hit, India’s finance ministry said India’s growth “accelerated” this fiscal year due to a series of structural reforms and policy measures.
In September last year, India reduced the goods and services tax rate on all products and services to Promote Domestic consumption. The country also announced Various trade deal as it looks to diversify its export markets.
risk currency
But while India has maintained growth momentum amid an increasingly uncertain global economic environment, its weak currency remains a concern for the government.
India has a trade deficit in goods, which cannot be fully offset by its net trade surplus in services and remittances. The country needs foreign capital flows to maintain a healthy balance of payments. The report highlights that when these flows dry up, the rupee depreciates.
2025, Rs. Appeared Asia’s weakest currency amid record capital outflows from foreign investors. Most experts believe the currency will fall further against the US dollar.
While the Economic Survey points to the global system as the reason for India’s macroeconomic success, which has not translated into monetary stability and capital inflows, economic experts have a different view.
Global investors will not consider investing in India while global interest rates remain high in other major economies.
Anubhuti Sahay, head of India economic research at Standard Chartered Bank, explained that “if investors can earn 4%-4.5% in the United States without currency risk,” capital will not flow to India.
She added that while India’s growth story makes a strong investment case, India needs to improve the ease and speed of doing business in the country to attract capital.
Sahai said investors’ expected returns from strong growth markets such as India have been eroded because of the time required to do business in the country.
