S&P Global projects India to grow 7% in FY27 as global uncertainty, energy shocks weigh

As per the latest business developments, India’s economy is anticipated to grow around 7 percent in FY27, moderating from 7.8 percent in the previous financial year, as global uncertainty and energy supply disruptions weigh on the outlook, S&P Global stated on September 30.

The projection comes even as India has demonstrated resilience against high US tariffs and an increasingly uncertain global environment, with domestic drivers helping the economy outperform expectations in FY26, S&P Global stated in its annual India Research Chapter report, India Forward: Reimagining Expansion.

“India has a significant opportunity to convert macroeconomic resilience into sustained economic momentum,” Yann Le Pallec, President of S&P Global Ratings and Chairman of the Board of Crisil, stated.

Pallec further noted that the next phase of expansion would depend on continued development of physical infrastructure, competitive federalism, deeper capital markets and stronger financial intermediation. Energy shock poses key risk

S&P Global flagged India’s exposure to disruptions in the Strait of Hormuz as one of the major vulnerabilities facing the economy.

S&P stated the disruption had resulted in reductions of 20 percent in crude supplies, 12 percent in LPG and 16 percent in LNG.

S&P stated the energy shock could additionally strengthen the case for accelerating India’s transition towards greater energy self-reliance, although the power system would need to balance clean energy ambitions with reliability and affordability.

Domestic economy stays resilient

Despite these external risks, S&P Global stated India’s FY26 expansion performance demonstrated the resilience of domestic demand and the economy’s ability to withstand a difficult global backdrop.

The note stated sustaining the momentum would increasingly depend on India’s ability to translate macroeconomic resilience into productivity upside, investment and deeper financial markets.

Digital indian rupee could emerge as fourth DPI layer

The report additionally identified the digital indian rupee as a potential new pillar of India’s digital public infrastructure.

S&P Global stated the central bank digital currency could eventually become a “fourth layer” of the country’s digital public infrastructure by allowing programmable rules to be embedded directly into money.