Archive · 7 Oct 2026
World Bank Raises India’s FY27 Growth Forecast to 7.1%
The World Bank now expects India’s economy to grow by 7.1% this fiscal year, more than it expected in April.
The economy grew faster than expected at the start of the year.
People’s spending, exports, factories and services are expected to help growth.
The Bank thinks growth may slow later in the year.
Less rain than usual could make farming and rural spending weaker.
Higher oil prices, El Niño and stock market changes could also cause problems.
The Bank expects India to grow by 7.2% in FY28.
It says some Indian companies use AI, but many do not expect it to improve their productivity much yet.
Better skills and infrastructure could help more businesses benefit from AI.
The World Bank raised its FY27 India growth forecast to 7.1%, from 6.6% in April, citing stronger-than-expected activity.
India’s economy grew 7.8% in FY26 and 7.8% in the first quarter of FY27; the Bank expects growth to moderate in later quarters.
Private consumption is expected to lead growth, while exports, industry and services support the outlook; weaker agriculture may weigh on rural demand.
The Bank projects 7.2% growth for India in FY28 and 6.9% growth for South Asia in 2026; excluding India, regional growth is forecast at 3.6%.
The Bank flagged risks from oil prices, El Niño and market corrections, and said AI use and expected productivity gains remain limited at many Indian firms.
- Who
- The World Bank.
- What
- It raised its forecast for India’s FY27 GDP growth to 7.1%, from 6.6% in April.
- When
- Announced Tuesday; the forecast covers fiscal year 2026–27.
- Where
- India; the accompanying regional outlook covers South Asia.
- Why
- Growth has held up better than expected, supported by domestic demand, exports, industry and services.
Growth supports
Risks and constraints
Economic outlook
Growth supports
The World Bank upgraded its forecast after stronger-than-expected activity; domestic demand, exports, industry and services support growth.
Risks and constraints
The Bank expects growth to moderate in later quarters and cites oil prices, El Niño and market corrections as risks that could unsettle capital flows.
Agriculture and rural demand
Growth supports
Strength in other parts of the economy is expected to offset some weakness in agriculture, and above-average rainfall since July narrowed the monsoon deficit.
Risks and constraints
The overall southwest monsoon rainfall shortfall has weakened agricultural prospects and may reduce rural demand while adding to food inflation.
AI and productivity
Growth supports
India has a large technical workforce, an internationally integrated IT sector and digital infrastructure; private AI investment also rose between 2024 and 2025.
Risks and constraints
AI adoption remains uneven: 23% of Indian firms report using AI, and nearly 75% expect little or no productivity benefit.
- India growth forecast, FY27
- 7.1%, up from 6.6% in April
- India GDP growth, FY26
- 7.8%, compared with 7.2% in FY25
- India GDP growth, first quarter of FY27
- 7.8%
- India growth forecast, FY28
- 7.2%
- South Asia growth forecast, 2026
- 6.9%; excluding India, 3.6%
- Firms reporting AI use
- 23% in India, compared with 43% in the United States
- Indian firms expecting little or no AI productivity benefit
- Nearly 75%
- Private AI investment in India
- Rose from $1.2 billion in 2024 to $4.1 billion in 2025
Sources
India To Grow by 7.1% in FY27
World Bank raises India’s FY27 GDP growth forecast to 7.1%
World Bank lifts India growth outlook
World Bank ups India’s GDP growth projection to 7.1 pc for FY27
World Bank raises India’s FY27 growth forecast to 7.1% from 6.6% earlier
World Bank ups India's GDP growth projection to 7.1% for FY27
World Bank raises India’s FY27 growth forecast by 50 bps to 7.1 pc on robust domestic demand
World Bank raises India FY27 growth forecast to 7.1%
