The Indian economy is expected to grow by 7.1 to 7.3 per cent in the current financial year, with a sustained revival in private investment providing an additional source of demand, Deloitte India said in its latest Economic Outlook on Friday.
The projection is in line with the Reserve Bank of India's 7.1 per cent estimate, but ahead of the 7 per cent forecast by the International Monetary Fund, the Asian Development Bank, S&P Global Ratings and Moody's. Deloitte expects growth of 6.6 to 7.0 per cent in FY2027-28.
Why private investment is the story
Deloitte India economist Rumki Majumdar said India's growth over the past decade had rested on resilient household spending and sustained public investment in infrastructure. Businesses now have better connectivity, healthier balance sheets and higher capacity utilisation, which strengthens the case for expansion.
"The question is whether these conditions will encourage private investment to play a larger role in boosting growth in the coming years," Majumdar said, adding that recent indicators offer grounds for optimism. Gross fixed capital formation grew by 11.9 per cent in the first quarter of FY2026-27 — its fastest expansion in four years.
Majumdar said a shift towards investment in strategic sectors such as semiconductors, electronics, defence manufacturing, clean energy and AI infrastructure would add to private capital expenditure momentum, since these sectors require substantial upfront investment.
Risks on the horizon
Geopolitical tensions, volatile energy prices and trade disruptions remain risks to the outlook, the report said. "India has improved many of the business conditions needed to expand. Turning those improvements into sustained private investment now depends on how confidently firms can plan, finance, and execute their next projects," Majumdar added.
Sources:
The Hindu BusinessLine (PTI): Deloitte projects India's GDP to grow 7.1-7.3% in FY27
The projection is in line with the Reserve Bank of India's 7.1 per cent estimate, but ahead of the 7 per cent forecast by the International Monetary Fund, the Asian Development Bank, S&P Global Ratings and Moody's. Deloitte expects growth of 6.6 to 7.0 per cent in FY2027-28.
Why private investment is the story
Deloitte India economist Rumki Majumdar said India's growth over the past decade had rested on resilient household spending and sustained public investment in infrastructure. Businesses now have better connectivity, healthier balance sheets and higher capacity utilisation, which strengthens the case for expansion.
"The question is whether these conditions will encourage private investment to play a larger role in boosting growth in the coming years," Majumdar said, adding that recent indicators offer grounds for optimism. Gross fixed capital formation grew by 11.9 per cent in the first quarter of FY2026-27 — its fastest expansion in four years.
Majumdar said a shift towards investment in strategic sectors such as semiconductors, electronics, defence manufacturing, clean energy and AI infrastructure would add to private capital expenditure momentum, since these sectors require substantial upfront investment.
Risks on the horizon
Geopolitical tensions, volatile energy prices and trade disruptions remain risks to the outlook, the report said. "India has improved many of the business conditions needed to expand. Turning those improvements into sustained private investment now depends on how confidently firms can plan, finance, and execute their next projects," Majumdar added.
Sources:
The Hindu BusinessLine (PTI): Deloitte projects India's GDP to grow 7.1-7.3% in FY27
