India’s economy likely to grow 7 pc in FY27: S&P Global

Mumbai: India’s economy is projected to grow 7 per cent in fiscal 2026-27 after delivering a stronger-than-expected 7.8 per cent expansion in FY26, according to an S&P Global-Crisil report on Wednesday.

The report said India’s resilience amid global uncertainty and high US tariffs highlights the strength of domestic economic drivers, though growth is expected to moderate as the country enters its next phase of development.

The report, titled “India Forward: Reimagining Growth”, said the country’s growth is expected to moderate to around 7 per cent in fiscal 2026-27.

However, it noted that India remains well-positioned to sustain its development trajectory if it can successfully translate macroeconomic resilience into long-term growth momentum.

Yann Le Pallec, President of S&P Global Ratings and Chairman of the Board for Crisil, said India has a significant opportunity to build on its economic resilience through continued infrastructure development, greater competitive federalism, deeper capital markets and stronger financial intermediation.

The report highlighted that India’s stronger-than-expected growth underscores the resilience of domestic demand and the economy’s ability to navigate an increasingly uncertain global landscape.

It added that the country’s next phase of growth will depend on sustaining investment momentum and strengthening key economic institutions.

On the geopolitical front, the study suggested that India is increasingly positioning itself as a leading power rather than a balancing power in global affairs.

It said the country’s evolving foreign policy strategy is likely to involve selective cooperation with major powers while deepening engagement with emerging economies.

The report also flagged energy security as a key concern following disruptions in supplies passing through the Strait of Hormuz. According to S&P Global Energy President Dave Ernsberger, India has faced a 20 per cent reduction in crude oil supplies, a 12 per cent decline in LPG availability and a 16 per cent drop in LNG flows due to the continuing disruption.

He noted that economic resilience and energy security remain critical as the country responds to the supply shock.

More than half of India’s crude oil imports pass through the Strait of Hormuz, making it one of the countries most exposed to disruptions in the strategic waterway.

The report called for greater diversification of supply sources and the creation of strategic reserves for crude oil, refined products and natural gas to strengthen long-term energy security.

The report also pointed to the growing potential of the digital rupee, stating that the central bank digital currency (CBDC) could emerge as the fourth layer of India’s digital public infrastructure.

It said the digital rupee could enable programmable money and help keep cross-border trade and remittances anchored in sovereign currency in an increasingly tokenised global economy.

IANS