India's FY27 Economic Growth Forecast Revisions Indicate Slowing Expansion to 6.6%

India's GDP Growth Slows Down Due to Weaker Investments and Consumption

India's GDP growth is expected to slow down to 6.6 per cent in the current fiscal year (FY27) compared to 7.7 per cent in the previous year (FY26), according to a report by BMI, a Fitch group company. This slowdown is attributed to weaker investments and consumption growth, as well as trade shocks from the West Asia crisis.

The government data released last week showed that GDP growth in FY26 accelerated to 7.7 per cent from 7.1 per cent in FY25, supported by healthy consumption and robust investment activity. BMI expects the rupee to trade in the range of 95.1 against the US dollar this calendar year, with the rupee's depreciation from its 87 average level in 2025 expected to support export competitiveness and offset the drag on GDP from the Iran conflict's terms-of-trade shock.

The GST reforms implemented in September 2025 caused a consumption boom in the December quarter of FY26, but consumption growth fell by 1.1 percentage points to 7.1 per cent year-over-year in the March quarter of FY26.