India’s economic growth is expected to moderate in FY27 after accelerating to 7.7% in FY26. According to economists at Elara Capital, the improvement in FY26 was a cyclical recovery in demand rather than a structural shift in the economy. Motilal Oswal expect the FY27 growth to slow to 6.5% broadly in line with the Reserve Bank of India’s (RBI) revised estimate of 6.6%.

The economists note that FY27 is facing headwinds since the beginning of the fiscal year unlike in FY26 where growth remained strong through most of FY26 and peaked at 8.3% in Q2 FY26 before moderating slightly in Q4 FY26.