S&P Global Forecasts 7% Growth for India in FY27, Citing Infrastructure and Capital Markets

New Delhi, Oct 1 (KNN) India’s economy is expected to grow by around 7 per cent in fiscal 2026-27, moderating from 7.8 per cent in FY26, with infrastructure development, deeper capital markets and stronger financial intermediation likely to support the next phase of growth, according to S&P Global.

The report said India’s economy outperformed expectations in FY26 despite high US tariffs and global uncertainty, supported by domestic economic factors. It expects growth to moderate to around 7 per cent in FY27.

“Growth is expected to moderate to about 7.0 per cent in fiscal 2026-27, as India's next phase of development will depend on how effectively it converts macroeconomic resilience into sustained momentum,” ANI reported, citing the report.

Yann Le Pallec, President, S&P Global Ratings, and Chairman of the Board for Crisil, said India could build on its economic resilience by advancing physical infrastructure development.

“India has a significant opportunity to convert macroeconomic resilience into sustained economic momentum. Our research suggests that the country can build on this momentum by advancing the next phase of physical infrastructure development, supported by competitive federalism, deeper capital markets and more robust financial intermediation,” Le Pallec said.

The report noted that India’s capital market has expanded over the past decade alongside economic growth. As of June 30, 2026, India’s equity market had an investable market capitalisation of USD 2.03 trillion.

S&P Global also noted that a majority of actively managed Indian funds had underperformed their respective benchmarks across multiple market cycles and economic conditions.

On energy security, the report said more than half of India’s crude imports move through the Strait of Hormuz, exposing the country to potential disruptions in the key shipping route.

It said India’s energy resilience would require diversified supply sources, integrated storage and strategic reserves for crude oil, refined products and, where feasible, gas.

The report also said India’s next phase of energy transition would need to balance climate objectives with the need for reliable and affordable electricity.

(KNN Bureau)