India to grow at 7% in FY27: S&P Global highlights infra and capital markets
S&P Global predicts India's economy will grow at 7% in FY27, driven by infrastructure and deeper capital markets.
India's economic trajectory remains robust, with the nation's economy projected to expand by approximately 7.0 per cent in fiscal 2026-27. This follows a period of even more intense activity, as the country is expected to see a stronger growth rate of 7.8 per cent during the 2025-26 fiscal year, according to a recent report by S&P Global.
While the growth figures show a slight moderation compared to the previous year, the report suggests that the upcoming phase of India's economic journey will be defined by how well the nation translates its current macroeconomic resilience into long-term, sustained momentum.
Key drivers for the next economic phase
According to the analysis, the transition to the next stage of development will not happen by chance. Instead, it hinges on several critical pillars that can solidify India's position on the global stage. The report identifies three primary areas that will determine the success of this expansion:
- Physical Infrastructure: Advancing the next wave of large-scale infrastructure projects is vital for supporting economic activity.
- Deeper Capital Markets: Expanding the reach and depth of financial markets to facilitate easier investment and growth.
- Financial Intermediation: Strengthening the systems that connect savers with borrowers to ensure smooth capital flow.
Yann Le Pallec, President of S&P Global Ratings and Chairman of the Board for Crisil, emphasized that India has a massive opportunity to build upon its current resilience. He noted that progress in these areas, supported by competitive federalism, will be essential for maintaining momentum.
The state of India's capital markets
The report takes a close look at the evolution of India's financial landscape over the last ten years. It highlights a significant trend where strong economic growth has been paired with a deepening listed equity market. As of June 30, 2026, the investable market capitalization in India's equity market reached a staggering USD 2.03 trillion.
However, the report also brings a cautionary note regarding fund management. It observed that a majority of actively managed Indian funds have struggled to outperform their respective benchmarks, even when accounting for various market cycles and different economic environments.
Navigating energy security and global uncertainty
Beyond domestic growth, S&P Global addressed the vulnerabilities India faces in an increasingly unpredictable global landscape. A major point of concern is the nation's energy security, particularly regarding crude oil imports.
The report points out a significant geographical risk: more than half of India's crude imports pass through the Strait of Hormuz. This makes the country's energy supply vulnerable to any disruptions in that specific waterway. To mitigate these risks, the report suggests that India must look beyond simple supply management and focus on:
- Diversifying its sources of energy supply.
- Developing integrated storage systems.
- Building strategic reserves for crude oil, refined products, and gas where possible.
Finally, the report touches upon the complexities of India's energy transition. It notes that as the country moves toward greener goals, it must strike a delicate balance between meeting its climate change ambitions and ensuring that electricity remains both reliable and affordable for its citizens.