Fitch unit raises India FY27 growth forecast to 7.5%

New Delhi: BMI, a unit of Fitch Solutions, raised India's economic growth forecast for this 2026-27 to 7.5% year-on-year from its previous estimate of 6.8%, citing strong growth momentum and sustained investment in artificial intelligence (AI). The agency cautioned, however, that higher oil prices and El Nino-related disruptions pose downside risks to the outlook. "High-frequency indicators point to stronger than previously expected growth momentum, and we expect an AI investment boom to continue supporting growth," it said.

Conversely, BMI revised its growth forecast for 2027-28 down to 6.3% from 6.5%.

It said persistently high energy prices could weigh on household consumption and widen the import bill, while El Nino could affect agricultural output and rural incomes, besides adding to inflationary pressures.


The forecast follows India's GDP accelerating at a better-than-expected 7.8% in first quarter of 2026-27. Furthermore, the report highlighted that the agency's GDP tracker suggests growth will reach around 8.3% in the second quarter of the financial year.

"Planned AI-related investment by Reliance, Adani, AWS and Microsoft, along with government efforts to expand power capacity for data centres under the 2025 SHANTI Act will likely provide a durable boost to GDP given the longer-term nature of these commitments," the report said.