ADB Projects India's FY27 Growth At 6.6%, Outpaces IMF Estimate Amid Middle East Conflict Risks

The Indian economy is forecasted to grow at 6.6% for the fiscal ending on March 31, 2027, according to Asian Development Bank's (ADB) July 2026 outlook.

The growth will be supported by policy interventions to attract more foreign capital, as well as fuel tax cuts, targeted credit support, strong services exports, and public capital expenditure, ADB said, while flagging elevated energy prices, which impact incomes. The latest revision has been lowered from 6.9% projected in April.  

Notably, ADB's projection for Indian economy is higher than International Monetary Fund's estimate of 6.4% for FY27 and 6.7% for FY28.

ADB has maintained growth forecast for the next fiscal at 7.3% , citing improved global conditions and export competitiveness gained through trade agreements with various partners. However, risks tilt to the downside driven by heightened geopolitical tensions, or weather-induced weakness in agriculture.

In addition to India's growth forecast, South Asia's growth estimate is reduced to 6.0% in the current and 6.7% in next fiscal due to higher oil prices, rising freight costs, and uncertainty over remittances stemming from the conflict.

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 ADB has also lowered growth forecast for developing Asia and the Pacific  to 4.9%, down from the 5.1% projected in April, and 0.6 percentage points below the 5.5% growth recorded in 2025. These revisions come as the Middle East conflict has led to prolonged disruption in energy and supply chains, raising production costs and reducing economic activity. Despite these risks, the growth projection for the region is maintained at 5.1% for the fiscal ending on March 31, 2028 , indicating recovery in economic activity amid hopes of easing Middle East tensions.

The downside risks for overall risks in growth include renewed escalation of the Middle East conflict, prolonged energy market
uncertainty, tighter global financial conditions, a sharp correction in global equity markets and re-pricing of AI-related
stocks, rising trade policy uncertainty, food price pressures, and a deeper property downturn in the PRC.
 

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