India is projected to grow by 7.2% in 2027, outpacing many major economies

India’s economy is projected to grow by 6.8% to 7.2% in FY2027, outpacing many major economies.

The world’s fourth-largest economy is targeting this growth on the back of a stable domestic economy and reduced external uncertainties, as India’s finance ministry targets a trade deal with the US “this year” in its economic survey for the 2026 financial year.

India is expected to remain the fastest growing economy in the world, according to the International Monetary Fund, which has pegged its growth at 6.4% in 2026 and 2027. In contrast, the IMF projects the global economy to grow by 3.3% in 2026, slowing slightly to 3.2%, with large economies such as the UK and Japan growing in 2027. low single digits.

The outlook for the Indian economy for the next fiscal year is “one of sustained growth amid global uncertainty, warranting caution but not pessimism,” the report said.

As reported earlier this month, India’s economy is projected to grow 7.4% in the fiscal year ending March 2026, up from 6.5% growth in the last fiscal.

Since August, India has exported to the US is charged More than 50% and as long as negotiations continue, the deal remains difficult.

But India’s economic growth has not been hindered by slowing exports to the US, according to an economic survey.

Textiles, seafood, gems and jewellery, auto parts and leather goods are the main products exported from India. affected Subject to US tariffs. But according to data shared by the Indian government, these products have found alternative markets.

Indian seafood is now being sold in countries such as China and Malaysia, while the country’s exports of auto parts to the UAE are also on the rise, the report said.

Despite the tariff shocks, the finance ministry said India’s growth “accelerated” in the current fiscal year thanks to a slew of structural reforms and policy measures.

In September last year, India reduced the tax rates on goods and services strengthen internal consumption. The country also announced several trade deals as it seeks to diversify markets for exports.

But while India maintains a history of growth amid an increasingly uncertain global economic climate, its weak currency is a concern for the government.

India has a trade deficit in goods that cannot be fully offset by its net trade surplus in services and remittances. To maintain the balance of payments, the country needs foreign capital inflow. As these flows dried up, the rupee weakened, the report said.

In 2025, Rs appeared as the weakest Asian currency due to record capital outflows from foreign investors. Most analysts see the currency falling against the dollar.

While the Economic Survey points to the global system as the reason why India’s macroeconomic success has not translated into currency stability and capital flows, economic experts have a different view.

Global investors are not considering investing in India when global interest rates are high in other major economies.

“If an investor can make 4%-4.5% in the US without currency exposure, capital flows will not come to India,” explains Anubhuti Sahai, head of India economics research at Standard Chartered Bank.

He added that while India’s growth story is a strong investment case, India needs to improve the ease and speed of doing business in the country to attract capital.

Investors expect lower returns from a strong growth market like India because it takes longer to set up a business in the country, Sahai said.