India's economic growth rate to weaken at 6.6% in FY27 on slower investments, consumption: BMI

“India's Gross Domestic Product (GDP) is apt to turn astatine 6.6% successful the existent fiscal arsenic compared to 7.7% successful FY26, connected weaker investments and depletion maturation and commercialized shocks from the West Asia crisis,” Business Monitor International (BMI), a Fitch radical company, said.

According to authorities information released past week, GDP maturation successful FY26 accelerated to 7.7% from 7.1% successful FY25, supported by steadfast depletion and robust concern activity.

BMI expects the Rupee to commercialized successful the scope of 95.1 against the U.S. dollar this calendar year. It said the Rupee's depreciation from its 87 mean level successful 2025 volition enactment export competitiveness, offsetting the resistance connected GDP from the Iran conflict's terms-of-trade shock.

The Goods and Services Tax (GST) reforms implemented successful September 2025 caused a depletion roar successful December 4th FY26. Thereafter, depletion maturation fell by 1.1% points to 7.1% year-over-year successful March 4th FY26.

"Looking ahead, we proceed to expect 6.6% GDP maturation successful FY2026/27. Our projection represents a disposable slowdown from FY2025-26's 7.7% gait but exceeds India's mean 6.1% per annum maturation complaint implicit the past decade," it said. BMI's projection is successful enactment with RBI's 6.6% maturation estimates for FY27.

BMI attributed the dilatory maturation complaint this fiscal to 3 factors. First, the interaction of past year's GST reforms connected home depletion is apt to wane. Also, higher terms ostentation which BMI expects to deed 5.3% successful FY27 volition hinder depletion maturation amid disruption astatine Strait of Hormuz.

Thirdly, BMI expects concern maturation to dilatory during the fiscal year. "This slowdown is not owed to our caller forecast of accumulative 50 ground points (bps) complaint hike by the RBI successful FY2026/27, since the effect connected maturation volition chiefly beryllium felt during FY2027/28."

BMI said the presently debased level of short-term involvement rates pursuing the RBI's 125 bps complaint chopped during 2025 volition enactment the system done the ongoing vigor crisis.