India’s Growth Seen Above 7% in FY27 as Investment and Exports Take Centre Stage: SBI Funds Management (SBIFM) Research
- IBEF
- September 8, 2026
India’s economic growth is expected to remain above 7% in FY27, supported increasingly by investment and exports, according to a report by SBI Funds Management (SBIFM) Research. The report noted that India’s real Gross Domestic Product (GDP) grew 7.8% year-on-year in Q1 FY27, with investment and exports emerging as the key growth drivers. Real gross fixed capital formation and exports grew by around 12% each, compared with 7.1% growth in consumption, indicating a shift in the composition of economic growth. Nominal GDP growth is also expected to accelerate to above 12% in the coming quarters. Corporate investment is projected to strengthen further, with capital expenditure by BSE 500 companies expected to increase by 11% in FY27, following capital expenditure of Rs. 10.4 lakh crore (US$117.69 billion) in FY26. The power sector is expected to account for around 55% of incremental corporate capital expenditure, followed by the iron and steel and capital goods sectors.
The report stated that as the impact of domestic policy support moderates and consumption growth becomes less broad-based, the investment cycle and global trade cycle are expected to play a larger role in supporting economic expansion. Exports, manufacturing, capital goods and other business-oriented sectors are therefore expected to benefit from the changing growth composition. However, the outlook also faces risks from sticky inflation, elevated global commodity prices and higher global interest rates. SBIFM Research noted that Brent crude prices could remain elevated over the next six months due to factors including China’s rebuilding of reserves, inadequate European gas storage and declining US crude inventories. Against this backdrop, the report suggested that interest rates could remain higher for longer globally. For India, the Reserve Bank of India could eventually shift from its neutral stance towards monetary tightening, with cumulative rate hikes of around 50 basis points in FY27 considered plausible, depending on inflation and other economic conditions.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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