Deloitte India has raised its FY27 growth forecast to 7.1-7.3 per cent from the earlier projection of 6.5-6.8 per cent, citing sustained private demand and improving investment conditions. According to reports from Business Standard, the accounting and consulting major highlighted that capacity utilisation has averaged above 75.7 per cent for six consecutive quarters, which is likely to reduce spare capacity and incentivise firms with healthier balance sheets to invest. The upgrade reflects growing confidence in India's economic momentum driven by private sector participation. In its Economic Outlook report, Deloitte India forecast GDP growth of 6.6-7.0 per cent for FY28, following the projected expansion of 7.1-7.3 per cent in FY27. The forecast is broadly in line with estimates from several other institutions, with the Reserve Bank of India and OECD projecting 7.1 per cent growth, while the International Monetary Fund, Asian Development Bank, S&P Global Ratings and Moody's have estimated growth at 7 per cent.
Gross fixed capital formation grew by 11.9 per cent in the first quarter of FY27, marking its fastest expansion in four years, as reported by Deloitte India. The report noted that new private projects increased by 70.6 per cent over Q4FY26 levels, leading the overall increase in fresh investment plans during Q1FY27. However, overall fresh investment plans declined 4.27 per cent quarter-on-quarter to ₹8.27 trillion in Q1FY27 from ₹8.63 trillion in Q4FY26, with private investments dropping 31.88 per cent sequentially. Despite this decline, the report indicates that investments in strategic sectors suggest acceleration may extend beyond a single quarter. A sustained recovery in private capital expenditure could provide an additional driver of domestic demand while expanding India's productive capacity, with the extent of business investment increases being crucial in determining the growth trajectory.
According to Deloitte India's report, the Reserve Bank of India estimated private sector capex at ₹3.2 trillion for FY27, compared with ₹2.6 trillion in FY26. The aggregate cost of projects reached a record ₹4.4 trillion in FY26, up from ₹3.7 trillion in FY25, as reported by Business Standard. Finance Minister Nirmala Sitharaman has emphasised that raising both the scale of investment and private sector participation is essential to strengthening the country's innovation capacity. Deloitte India economist Rumki Majumdar noted that investment in strategic sectors, including semiconductors, electronics, defence manufacturing, clean energy and artificial intelligence infrastructure, could further strengthen the private capex cycle. These industries typically require substantial upfront investments, potentially supporting capital formation and expanding India's productive capacity over the longer term.
Kyunghoon Kim, Head of India & South Asia Team at Korea Institute for International Economic Policy (KIEP), has highlighted that India's growth has set to surpass 7% for the fifth consecutive year, with the country's average annual economic growth between 2021 and 2025 at 7.83 per cent - the second-highest five-year average in data going back to 1960, just behind the 7.89 per cent recorded between 2003 and 2007. As reported by The Times of India, India's economy contracted by 5.8% in 2020 during the pandemic before rebounding with growth of 9.7% in 2021, then expanding by more than 7% in each of the following four years. India's GDP was just over $1 trillion in 2007; now it is nearly $4 trillion, with the economy projected to reach $4.15 trillion by the end of FY2027 - an almost 60% rise in just six years despite multiple global uncertainties including the Russia-Ukraine war, Trump's trade policies, and ongoing US-Iran war. The International Monetary Fund has raised its growth projection for India from 6.4% to 7%, with the IMF noting that India stands out with upward revisions reflecting sustained momentum and growing evidence of stronger growth potential supported by favorable demographic dynamics and continued structural reforms.
As reported by Deloitte India, the report identified faster land acquisition, predictable approvals, reliable utilities and effective contract enforcement as enablers for investment decisions to translate into operational projects. However, the forecast faces risks from geopolitical tensions, resultant trade disruptions and energy price volatility. Rumki Majumdar, economist at Deloitte India, noted that businesses now have better connectivity, healthier balance sheets, and higher capacity utilisation, which are strengthening the case for expansion, though the question remains whether these conditions will encourage private investment to play a larger role in boosting growth. The report cautioned that global geopolitical tensions, energy-price volatility and disruptions to international trade remain key risks to India's economic growth projections, with the success of turning improved business conditions into sustained private investment depending on how confidently firms can plan, finance, and execute their next projects. The outlook comes against a weaker global backdrop, with the IMF projecting worldwide economic growth of 3.1% in 2026 and 3.4% in 2027, with geopolitical tensions, elevated energy prices and financial risks clouding the global outlook.
