World Bank Raises India GDP Growth Forecast to 7.1% for FY27

The India GDP growth forecast for the current fiscal year has been raised to 7.1% by the World Bank, an increase of 0.5 percentage points from its April projection of 6.6%. The upgrade follows stronger-than-expected economic growth in the first quarter despite global trade and geopolitical uncertainties.

In its latest India Development Update released on Tuesday, October 7, 2026, the World Bank said economic momentum had remained stronger than previously anticipated.

“We have upgraded our FY27 growth forecast to 7.1 per cent from 6.6 per cent in April, as growth has held up better than expected despite trade and geopolitical uncertainties.”

India Records 7.8% Growth in First Quarter

The World Bank noted that India’s GDP grew by 7.8% in the first quarter of FY27, exceeding expectations.

According to the report, India’s economy had already accelerated to 7.8% growth in FY26 from 7.2% in FY25, supported by strong investment and solid private consumption.

The favourable policy and credit environment helped offset pressures arising from trade tensions.

Private Consumption Remains Key Growth Driver

Private consumption is expected to remain the main driver behind the India GDP growth forecast of 7.1%.

Rural consumption initially grew faster than urban demand, supported by strong agricultural performance, rural income assistance, food subsidies and low inflation.

Urban consumption strengthened later following income-tax relief and GST cuts, according to the World Bank.

However, the report said a rainfall deficit through August could modestly affect rural demand during FY27.

Investment Outlook Broadly Unchanged

The World Bank said the investment outlook remains broadly unchanged.

Heightened global uncertainty is expected to weigh on private investment as the impact of earlier frontloading fades.

However, supportive financial and policy conditions, including stronger public investment, are expected to partly offset those pressures.

Government consumption, meanwhile, is expected to remain subdued.

India’s Exports Perform Better Than Expected

One of the major positive factors behind the revised India GDP growth forecast has been the stronger performance of exports.

The World Bank said India's exports had performed better than expected and were likely to provide the main upside to FY27 growth compared with its April projections.

The improved export performance comes despite continuing global economic and geopolitical uncertainty.

Industrial Growth Exceeds Expectations

On the supply side, the World Bank expects industrial activity to perform better than initially projected.

Industrial growth has exceeded expectations since April despite global headwinds and is expected to help compensate for a weaker outlook for agriculture.

The report therefore sees stronger industrial activity, exports and domestic consumption supporting India's economic momentum during FY27.

World Bank Sees Resilient Growth Despite Global Risks

The revised 7.1% India GDP growth forecast reflects the economy’s stronger-than-expected performance during the opening months of the fiscal year.

While global trade uncertainties, geopolitical tensions, weaker agricultural prospects and cautious private investment remain risks, stronger consumption, exports, industrial activity and public investment are expected to provide support.

The upgrade from 6.6% to 7.1% marks a significant revision to the World Bank’s April forecast and reflects India's stronger economic performance so far in FY27.