Four global agencies raise India’s growth forecasts ::::: India has spent decades telling its children: study hard, acquire qualifications

The Indian economy had demonstrated resilience despite the shock from the US-Iran war and a significant deterioration in terms of trade during the first half of 2026. 

India has spent decades telling its children: study hard, acquire qualifications and build a better life.
Millions have done exactly that.

India is growing. Companies are investing. Technology is advancing.

However, agency Fitch expects growth to moderate in the remainder of FY27, citing a slower pace of expansion in manufacturing and services, below-normal monsoon rainfall and rising inflation.  Fitch Ratings, S&P Global Ratings, the Organisation for Economic Co-operation and Development (OECD) and the Asian Development Bank (ADB) — have raised their growth projections for India for the current financial year, citing stronger-than-expected economic activity, resilient consumption and robust investment. The revisions follow India's better-than-expected GDP growth in the first quarter of FY27.

Fitch raised its FY27 growth forecast for India to 6.9% from 6.4%, while S&P Global Ratings increased its estimate to 7% from 6.6%. The OECD raised its projection by 80 basis points to 7.1%, while the ADB expects the Indian economy to grow 7% in FY27, reflecting stronger investment demand and resilient services exports.

Despite the upward revisions, Fitch and S&P expect growth to moderate in the second half of FY27 as the impact of GST rationalisation and income tax cuts fades. Weather-related risks, including below-normal rainfall, and rising inflation could also weigh on economic activity. 

The OECD projected India's growth to decline from 7.8% in FY26 to 7.1% in FY27 and 6.5% in FY28. It revised down its inflation forecast for FY26 to 5% from 5.2%, citing the expected limited pass-through of higher global energy prices following tax cuts.

The ADB projected India's economy to grow 7% in FY27, supported by resilient consumption, healthy investment and strong services exports, which are expected to offset the impact of higher energy costs and a weaker monsoon. The forecast was higher than its July 2026 projection by 40 bps.

However, the ADB downgraded its FY28 growth forecast to 7.1% from its July projection, citing base effects from faster growth in FY27. It retained its FY28 inflation forecast at 4% and lowered the FY27 projection to 5%.

India’s economic indicators are impressive. The economy reportedly grew by 7.8 percent in the April–June 2026 quarter, faster than many economists expected. Private investment has also strengthened. 

Yet the relationship between economic growth and employment is becoming increasingly uncomfortable. Even economists supportive of India’s growth story have asked why strong GDP numbers have not translated more clearly into job creation.

Official data offer some encouragement. India’s unemployment rate fell to 5.1 percent in July, down from 5.5 percent in June. Rural unemployment also declined. But urban unemployment stood higher, at 6.7 percent.

These aggregate figures, however, do not capture the anxiety experienced by educated young people.  

Companies have legitimate reasons to restructure. Businesses cannot preserve every job forever. Technologies change, markets shift and organizations must remain competitive. The problem begins when efficiency becomes the only value by which corporate decisions are judged.

A company may save money by eliminating 200 positions. Investors may welcome lower costs. Analysts may reward higher margins. Technology may perform the same task faster.

But what happens to the displaced worker rarely appears in the same spreadsheet. Modern capitalism has become extremely good at calculating the cost of labor.

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