On Wednesday, 23 September 2026, S&P Global Ratings lifted its GDP growth projection for India in FY27 to 7 per cent. The credit rating organisation revised its forecast upward from an earlier projection of 6.6 per cent, following stronger-than-anticipated levels of economic output.

Revised projections point to broader economic momentum, driven by household spending, manufacturing output, export volumes, and public capital outlays. The country's economy expanded at 7.8 per cent in the April–June quarter, lending support to a more favourable FY27 GDP growth forecast.

The ratings agency anticipates that growth will hold steady through much of the fiscal year before easing toward its close. S&P Global Ratings attributed the anticipated deceleration to diminishing returns from goods and services tax adjustments and personal income tax reductions. The organisation also drew attention to a number of factors that could weigh on expansion going forward.

S&P Global Ratings' latest economic outlook projects retail price inflation to hover around 5.1 per cent throughout FY27. Sustained inflationary trends may shape the direction of the Reserve Bank of India's interest rate policy going forward. The ratings agency anticipates the Reserve Bank of India will lift its benchmark interest rate by 25 basis points throughout FY27.

S&P projected that conditions would tilt towards higher borrowing costs, pointing to robust economic expansion, inflationary pressures, tensions across West Asia, and weather-related risks as contributing factors. Meteorological variability poses an ongoing risk to India's price levels and farming prospects through FY27.

According to S&P, total precipitation through September 9 had fallen roughly 15 per cent short of historical averages. Reduced precipitation may weigh on farm yields, keeping food prices under scrutiny. Elevated energy costs may place additional strain on both inflation and the value of the rupee.

S&P's updated outlook for FY27 GDP growth exceeds both the RBI's 6.7 per cent projection and Fitch Ratings' 6.4 per cent estimate. The ratings agency projects India's economy will expand by 7 per cent in the fiscal year ending 2027, based on its latest forecasts. The ratings agency forecasts India's annual economic expansion at 7.2 per cent by FY28, with a gradual moderation to around 7 per cent the following fiscal year.

Domestic consumption and investment remain the twin pillars underpinning India's projected economic expansion, according to S&P's assessment. Projections for an RBI interest rate adjustment contribute one dimension to the broader FY27 economic landscape. S&P indicated that robust expansion may remain compatible with restrictive borrowing costs as authorities keep watch over price pressures and overseas vulnerabilities.