New Delhi: India’s economy is poised to grow at 6.7% in the upcoming Financial year 2026-27, lower than the Central Government’s estimates of 7.4%, A CRISIL report has stated. Despite the challenges with the unreasonable US sanctions and slowing global demand, 2025-26 saw India’s economy grow at 6.5%.
The surge in domestic demand, induced by the pre-Diwali lowering of GST rates, and a once-in-a-decade deflation, helped India tide over the storm of US tariffs. In fact, merchandise exports to the US actually increased by 20.8% between April and July, more than the 10.7% growth witnessed in the same period last year.
“The Indian economy has performed far better than expected in fiscal 2026, driven by a stronger-than-expected surge in domestic demand and a softer-than-expected impact on India’s exports given the frontrunning of exports to the US in anticipation of higher tariffs in the first four months of fiscal 2026,” the report said.
For FY 2026-27, private consumption is expected to remain resilient, with the lowered GST rates and direct benefit transfers aiding it. Fixed capital formation is expected to boost growth, supported by healthier bank balance and corporate balance sheets.
A challenging global trade environment, induced by a slowing global demand, could be a major risk to India’s growth story, as the World Trade Organisation has predicted a slowdown in global trade volumes from 2.4% last year to 0.5% in 2026.
Besides, oil price volatility and unpredictable weather could impact demand, inflation and rural incomes, the report further said.
