BMI upgrades India's FY27 growth forecast to 7.5 per cent

BMI, the research arm of Fitch Solutions, has upgraded its forecast for India's economic expansion in the fiscal year ending March 2027, citing robust momentum in the industrial sector as a key driver of growth. The revised projection of 7.5 per cent represents an improvement from the analyst's previous estimates, reflecting expectations of sustained manufacturing output and continued investment activity.

The upgraded FY27 forecast signals confidence in India's ability to maintain its position as one of the world's faster-growing major economies. Industrial production, which has emerged as a critical component of economic expansion, is expected to provide meaningful support to overall gross domestic product growth during the period.

Despite the optimistic near-term outlook, BMI has adopted a more cautious stance regarding FY28 growth prospects. The forecaster has reduced its projection for the subsequent fiscal year, citing elevated oil prices and persistent inflationary pressures as headwinds that could constrain economic expansion.

Global crude oil price volatility presents a particular challenge for India's economy, given the country's substantial dependence on energy imports. Combined with inflation risks stemming from supply-side constraints and other factors, these pressures could weigh on consumer spending and corporate investment in the medium term, according to BMI's assessment.