India’s economic growth is expected to remain above 7% in FY27, with investment and exports emerging as the key drivers as the contribution from consumption moderates, according to a report by SBI Funds Management Research.
The outlook follows 7.8% real GDP growth in Q1 FY27, when gross fixed capital formation and exports each grew by around 12%, while consumption expanded 7.1%. The report said the shift toward investment and external demand provides a stronger foundation for growth as the impact of domestic policy support fades.
Corporate capital expenditure is also expected to strengthen. Capex by BSE 500 companies is projected to rise 11% in FY27, following ₹10.4 trillion of spending in FY26. The power sector is expected to account for about 55% of incremental corporate investment, followed by iron and steel and capital goods.
The report expects nominal GDP growth to accelerate beyond 12% in the coming quarters, although persistent inflation and elevated global commodity prices could keep interest rates higher for longer. It also highlighted manufacturing, capital goods and export-oriented sectors as areas likely to benefit from the changing growth composition.
The stronger outlook comes despite global uncertainties, with India’s economy continuing to show resilience. Recent official data showed Q1 FY27 GDP growth of 7.8%, supported by investment, manufacturing and exports.