India’s real GDP to grow between 6.8% and 7.2% in 2026-’27, says Economic Survey

India’s real gross domestic product is expected to grow between 6.8% and 7.2% in the financial year 2026-’27, the government’s annual Economic Survey projected on Thursday.

The document said that the cumulative impact of policy reforms in recent years appeared to have lifted the economy’s medium-term growth potential closer to 7%.

“With domestic drivers playing a dominant role and macroeconomic stability well anchored, the balance of risks around growth remains broadly even,” the Economic Survey said. “…The outlook, therefore, is one of steady growth amid global uncertainty, requiring caution, but not pessimism.”

The Economic Survey, tabled by Union Finance Minister Nirmala Sitharaman in Parliament three days ahead of the Union Budget for the forthcoming financial year, details the state of the country’s economy and suggests measures to boost growth.

In the financial year 2025-’26, India’s gross domestic product is projected to grow at 7.4% as compared to 6.5% in 2024-’25, according to the first advance estimates released by the National Statistics Office on January 7. The projection released by the Ministry of Statistics and Programme Implementation is slightly higher than the Reserve Bank of India’s forecast of a growth rate of 7.3%.

The advance estimates give a broad picture of how the country’s economy may perform in the upcoming year, and help the finance ministry decide on budgetary allocations.

The Budget Session of Parliament began on Wednesday. Both Houses were adjourned after President Droupadi Murmu addressed a joint session of Parliament.

On Thursday, the Department of Economic Affairs stated in the Economic Survey that the global economy has been subjected to “multiple upheavals”, with the most disruptive among them being tariffs imposed by the United States on several countries.

Indian goods are facing a combined US tariff rate of 50%, including a punitive levy imposed in August.

The punitive tariffs of 25% were introduced as part of US President Donald Trump’s pressure campaign against countries purchasing discounted oil from Russia amid Moscow’s war on Ukraine.

After the punitive levies were announced, New Delhi had said it was “extremely unfortunate” that the US had chosen to impose additional tariffs on India “for actions that several other countries are also taking in their own national interest”.

Six rounds of negotiations have been held so far on a proposed India-US trade agreement, Moneycontrol reported on January 9.

Rupee decline

The Economic Survey said that a widened balance of payments deficit, along with uncertainty about the trade deal with the US, has exerted pressure on the Indian rupee, causing it to weaken.

At 2.30 pm Indian time on Thursday, the rupee was valued at 91.95 against the US dollar.

The document noted that from April 1 to January 22, the Indian currency depreciated by about 6.5% against the US dollar. However, the movement of the rupee has been “orderly”, the Economic Survey said.

“Over the medium to long term, exchange rate dynamics are expected to be guided by structural fundamentals, such as productivity gains, export diversification towards higher-value goods and services, deeper integration into GVCs [global value chains] and a stable policy environment rather than short-term fluctuations,” the document said.

Growth remains strong, says CEA

In the Economic Survey, Chief Economic Advisor V Anantha Nageswaran said that “even as the global economy navigates uncertainty, India continues to chart a strong growth path”.

Speaking about the first advance estimates on GDP, the survey noted that it surpasses projections of the last Economic Survey.

In the previous survey, the Union government had estimated that India’s real GDP will grow between 6.3% and 6.8% in the financial year 2025-’26.

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