India's economy is projected to grow at 6.6-6.8% in the fiscal year 2026-27 (FY27), driven by robust domestic fundamentals and the normalisation of global energy markets, according to a report by EY.
Growth forecast and key drivers
The EY report, released on 26 June 2026, highlights that India continues to demonstrate strong economic resilience despite external uncertainties. This growth is underpinned by sustained private sector activity and solid domestic economic fundamentals. The global energy market normalisation is expected to aid both growth and inflation dynamics.
Impact of global energy normalisation
Normalising energy markets globally are likely to reduce input costs for Indian industries and ease inflationary pressures, supporting consumption and investment. The report notes that lower energy prices could improve the trade balance and strengthen the rupee.
Private sector and domestic fundamentals
EY emphasised that India's growth story remains anchored by strong domestic demand and a vibrant private sector. The services sector continues to expand, while manufacturing shows signs of recovery. Government infrastructure spending and digital initiatives are also contributing to economic momentum.
According to the report, India's growth trajectory is expected to outpace many major economies, reinforcing its position as a key global growth driver. However, risks from geopolitical tensions and global monetary policy tightening remain.
