India Ratings Projects GDP Growth Slowdown to 6.8 Percent

India Ratings & Research projects India's GDP growth will slow to 6.8 percent for the 2026-27 fiscal year, a decrease from 7.6 percent in the previous year. The agency attributes this deceleration to food and fuel inflation caused by the West Asia conflict, a weak currency, and the agricultural impact of El Niño.

This forecast is slightly higher than the agency's May estimate of 6.7 percent and aligns closely with the Reserve Bank of India, which recently raised its own projection to 6.7 percent. The agency expects the rupee-dollar exchange rate to average ₹93.98 and retail inflation to average 4.9 percent.

Chief Economist Devendra Pant notes that while lower oil prices can reduce the trade and current account deficit, inflation from El Niño may limit growth. The agency estimates average crude oil prices at $85 per barrel for FY27 and forecasts the current account deficit will rise to 1.5 percent of GDP. Reaching the fiscal deficit target of 4.3 percent remains difficult because of fertilizer and liquefied petroleum gas subsidies.