Economy to grow at 7% in FY27: BMI

BMI, a Fitch Group company, on Monday forecast a 7.4 per cent growth for the current fiscal and 7 per cent for FY27 saying a favourable policy environment bode well for India’s economic outlook.

It said that monetary and regulatory measures should stimulate investment and consumption over 2026-27 fiscal. “A strong advanced estimate of the current fiscal year’s GDP, rising US-bound merchandise exports during the past two months, and a favourable policy environment bode well for India’s economic outlook,” BMI said in a report. The National Statistics Office (NSO) has projected a 7.4 per cent GDP expansion for FY2025/26 (April-March).

This implies the Government expects GDP will grow by around 7 per cent Y-o-Y on average in the second half of the fiscal year. The Indian economy grew at 6.5 per cent in 2024-25 fiscal. BMI revised upwards GDP forecast for 2025-26 to 7.4 per cent, up from 7.2 per cent projected earlier. It now expects GDP to rise by 7 per cent in FY2026-27, up from 6.6 per cent estimated previously. “Foundation has already been laid for a strong October-December quarter,” BMI said, adding that the economy would expand by more than 9 per cent Y-o-Y in the third quarter (October-December) of FY 2025-26. The Indian economy grew by a robust 7.8 per cent in the first quarter (April-June), and 8.2 per cent in the second quarter (July-September), as per official estimates.

BMI said the 2025 reforms to the goods and services tax and personal income tax systems have lowered the tax burden on households. The Reserve Bank of India also cut its policy rate by a total of 125 basis points last year. Finally, the Government has pushed to implement new labour codes and allow 100 per cent foreign ownership of local insurers. “The risks to our outlook are balanced, and stem from whether a future India-US trade deal that meaningfully lowers tariffs on US bound exports occurs,” BMI said.