Strong demand, capex to keep India growth near 7%

New Delhi: India’s real GDP growth is likely to remain resilient at 7-7.2 per cent in FY27, supported by robust domestic demand and the government’s continued focus on capital expenditure, while nominal GDP growth could reach 12.5-13 per cent, according to a report by EY.

The firm said India’s growth outlook remains relatively strong despite geopolitical uncertainties, elevated crude oil prices and a weaker global trade environment. Strong domestic economic activity and sustained public investment are expected to support growth through the year.

Industrial activity has also strengthened, with Index of Industrial Production (IIP) growth accelerating to a 23-month high of 7.3 per cent in June 2026. Average industrial growth during the first quarter of FY27 rose to 5.7 per cent, the highest in eight quarters. Manufacturing remained a key contributor, with output rising 7.8 per cent in June. Electrical equipment, motor vehicles, textiles and food products were among the stronger-performing segments.