The Asian Development Bank (ADB) on Friday projected India’s growth at 6.9 per cent for Fiscal Year 2026-27 as against 7.6 per cent for Fiscal Year 2025-26.
ADB’s projection is higher than the World Bank’s 6.6 per cent but at par with the Reserve Bank of India’s (RBI) forecast of 6.9 per cent.
“The forecasts are informed by assumptions finalized on 10 March under exceptionally high uncertainty envisaging an early stabilization scenario for the conflict in the Middle East. Evidence since then points to a higher likelihood of more persistent disruptions,” ADB said in its Asian Development Outlook (ADO). It expects the Indian economy to accelerate in Fiscal Year 2027-28 to 7.3 per cent.
Talking about the moderation in the growth number during the current fiscal as against the previous fiscal, ADB listed heightened global uncertainty due to the West Asia conflict, higher energy prices, and volatile trade and financial conditions. These external pressures are likely to weigh on exports, inflation, and capital flows in the near term. However, “Growth is expected to pick up in FY2027 (2027-28), supported by strong domestic demand, continued public investment, and an improving external environment,” it said.
According to ADB Country Director for India Mio Oka, despite external challenges, India’s growth outlook remains resilient, aided by supportive fiscal and monetary policies and regulatory reforms aimed at enhancing labour flexibility and integration with global value chains. “Over the medium term, investments in clean energy, power sector reforms, and measures to boost manufacturing competitiveness and attract investment will sustain growth,” she said.
Inflation is projected to rise to 4.5 per cent during the current fiscal, reflecting higher food and energy prices, before moderating to 4 per cent in the next fiscal as supply conditions improve. The current account deficit is expected to widen in the current fiscal due to higher imports, particularly crude oil, before narrowing in the next fiscal due to an expected normalisation of global energy markets and strengthened exports reflecting recent trade agreements with key partners, including the European Union, the United States, and New Zealand, the report said.
Investment is projected to remain robust. Central government capital expenditure is budgeted to rise by 11.5 per cent in the current fiscal year, reinforcing India’s investment-led growth strategy. Supportive monetary policy, regulatory reforms, improved logistics, and healthier corporate and banking sector balance sheets are expected to foster private investment momentum, the report said.
On the supply side, manufacturing and services growth is expected to remain strong. Manufacturing will benefit from recent trade agreements as well as key support measures outlined in the budget for semiconductors, electronic components, and rare earths. Services will also continue to be supported by the expansion of global capability centres and robust demand for high-value business services.
“ADO April 2026 underscores the importance of rationalising subsidies and transfers to protect vulnerable groups, preserving fiscal space for infrastructure and productivity-enhancing investments critical to long-term growth,” the report said.
Published on April 10, 2026