India Projects 7.3% GDP Growth Amid Global Trade Risks

The Ministry of Finance of India projects a real GDP growth rate of 7.3% for the second quarter of FY27, following a record 7.8% growth in the first quarter. According to the Monthly Economic Review for September 2026, this momentum is driven by resilient domestic demand, strong investment rates, and a broad-based expansion in manufacturing and services. Total merchandise and services exports rose 15.5% year-on-year to $399.3 billion between April and August, placing the country on a trajectory to approach $1 trillion in overall export value for the full financial year.

Despite these gains, the ministry warned of a stiff challenge to attract capital flows and short-term pressure on the rupee. External risks include rising global bond yields, spiking crude oil prices, and the weaponization of global supply chains. Specifically, the ministry flagged unsettled trade relations with the United States following the passage of the Graham Bill, which empowers the U.S. President to impose tariffs of up to 100% on countries purchasing Russian crude oil.

Additional pressures include retail inflation, which reached 4.82% in August, and a global shift of capital toward AI and superintelligence investments in developed economies. To maintain competitiveness, the ministry emphasized the need for improved governance and consistent policymaking. India currently maintains a foreign exchange reserve buffer of $765.9 billion as of September 18.