India To Grow 7% In FY27, Next Growth Phase Hinges On Infra, Deeper Capital Markets: S&P Global

India’s economy is expected to grow at around 7.0 per cent in fiscal 2026-27 after recording stronger-than-expected growth of 7.8 per cent in fiscal 2025-26, according to an S&P Global report.

The report said India significantly outperformed expectations in fiscal 2025-26 despite high US tariffs and global uncertainty, with domestic economic drivers supporting growth and helping the country navigate the uncertain global environment.

However, growth is expected to moderate to about 7.0 per cent in fiscal 2026-27.

It said, “Growth is expected to moderate to about 7.0 per cent in fiscal 2026-27, as India's next phase of development will depend on how effectively it converts macroeconomic resilience into sustained momentum”.

Yann Le Pallec, President, S&P Global Ratings, and Chairman of the Board for Crisil, said India could build on its economic resilience by advancing the next phase of physical infrastructure development.

“India has a significant opportunity to convert macroeconomic resilience into sustained economic momentum. Our research suggests that the country can build on this momentum by advancing the next phase of physical infrastructure development, supported by competitive federalism, deeper capital markets and more robust financial intermediation,” Le Pallec said.

The report said infrastructure development, deeper capital markets and stronger financial intermediation would be important for India’s next phase of expansion.

It also highlighted the growth of India’s capital market over the past decade, noting that the country had combined strong economic growth with a deepening listed equity market and a broad range of companies.

As of June 30, 2026, India’s equity market stood at USD 2.03 trillion in investable market capitalisation.

At the same time, S&P Global noted that a majority of actively managed Indian funds had underperformed their respective benchmarks across multiple market cycles and economic environments.

The report also examined India’s energy security amid an uncertain global environment. More than half of India’s crude imports move through the Strait of Hormuz, leaving the country exposed to disruptions in the key waterway.

According to S&P Global, strengthening India’s energy resilience will require diversified supply sources, integrated storage and strategic reserves for crude oil, refined products and, where feasible, gas.

The report further said India’s next phase of energy transition would need to balance climate ambitions with the requirement for reliable and affordable electricity.