Finance Ministry estimates India’s real GDP growth at 7.3% in Q2 FY27.
The projection is higher than RBI’s current 6.4% forecast for the quarter.
Strong 7.8% first-quarter growth has prompted several institutions to raise forecasts.
The Finance Ministry expects India’s real GDP to grow 7.3% in the July-September quarter of FY27, well above the Reserve Bank of India’s current projection of 6.4%.
“Growth momentum has extended into Q2 FY27, though at a more measured pace,” the ministry said in its Monthly Economic Review for September. “Our nowcasting measure, unveiled in the Economic Survey earlier this year, anticipates a real GDP growth rate of 7.3% in the fiscal second quarter,” it added.
The official GDP data for the quarter will be released on November 30. The ministry’s estimate follows the stronger-than-expected 7.8% growth recorded in April-June, compared with the RBI’s earlier forecast of 7%.
The RBI had issued its 6.4% Q2 growth projection on August 5, before the first-quarter figures were released on August 31. The central bank currently expects GDP growth to average 6.7% in 2026-27.
The stronger first-quarter performance has led several institutions to revise their forecasts. On September 23, S&P Global Ratings, Fitch Ratings, the OECD and the Asian Development Bank raised their estimates for India’s growth this fiscal by 40-80 basis points, putting their projections between 6.9% and 7.1%.
The Finance Ministry, however, cautioned that the recent pace of growth cannot be taken for granted amid global uncertainty.
India “cannot afford to rest on its post-Covid growth laurels”, the ministry said.
“It has to be earned every quarter. That is the challenge for policymakers,” the report added.
The ministry said global conditions had “turned unfavourable again”, citing higher oil prices, rising global bond yields, “unsettled” trade relations with the US and an AI bubble that has “not begun its inevitable meaningful deflation”.
These factors, it said, could make it harder for India and other developing economies to attract capital. The ministry expects net foreign direct investment to perform better this financial year than last.
“Indications are, however, that foreign direct investment inflows, on a net basis, should do better this financial year than last. Thus, short-term pressure on Indian assets, including the currency, remains,” it said.
The report also called for India to become more “competition-friendly” rather than simply “business-friendly”, arguing that greater competition would support innovation and manufacturing.
“Improved governance and enhanced state capacity at all levels of the government hold the key to a competitive Indian economy,” it said.
Foreign capital outflows remain a pressure point. Foreign investors have sold $9.36 billion worth of Indian stocks and bonds so far in 2026-27, following $16.59 billion in sales during 2025-26.
The rupee, which had nearly touched 97 to the dollar in May, was trading at 95.98. The currency has received some support from the RBI’s concessional swap windows, which attracted $133 billion in Foreign Currency Non-Resident (Bank) deposits over three months.
FDI flows have shown improvement, with net inflows reaching $7.35 billion in July, the highest in more than five years. Net FDI during the first four months of 2026-27 stood at $13.43 billion, compared with combined net inflows of $7.7 billion in 2024-25 and 2025-26.
