India Eyes Over 7% Growth In FY28 Despite West Asia Crisis, Says CEA

India’s economy is set to rebound to 7 per cent-plus growth in 2027-28 (FY28) as external conditions allow, Chief Economic Advisor V Anantha Nageswaran stated on Friday.

He highlighted macroeconomic stability measures and government initiatives in energy, trade, agriculture, and industry as key to maintaining high growth, even amid the West Asia crisis affecting the FY27 outlook.

Speaking after India’s provisional GDP release for 2025-26 (FY26), Nageswaran noted a “gratifying” rise in private consumption and an 8.2% growth in gross fixed capital formation, describing it as a “good pickup” continuing in quarterly numbers. India’s real GDP expanded 7.7% in FY26, with Q4 growth at 7.8%.

Earlier, the Reserve Bank of India revised its FY27 GDP forecast down from 6.9% to 6.6%, raising CPI inflation to 5.1%. Nageswaran said the finance ministry would use RBI projections as a base, accounting for upside and downside risks.

High-frequency indicators from January to April suggested sustained domestic demand, with resilient urban and rural automobile sales, steel, cement, and capital goods. Nageswaran attributed this to structural reforms and consistent public capital expenditure over the past decade.

Policy measures include customs duty waivers on 40 petrochemical products, an emergency credit guarantee for MSMEs, fertiliser support for over 50% of kharif requirements, and logistics aid for exporters. Trade deals with the UK, EU, and US may further bolster exports.

He cautioned, however, that rising trade deficits, oil price volatility, and monsoon-related uncertainties could affect growth, inflation, and private consumption going forward.