India Q2 FY27 GDP Projected to Grow at 7.3%: Finance Ministry

The Indian economy is estimated to grow by 7.3% in the second quarter of the current fiscal year FY27, according to the Finance Ministry’s Monthly Economic Review. This follows a robust 7.8% growth recorded in the June quarter, which marked the highest first-quarter growth in the current series.

Tracking Sectoral Indicators

High-frequency data reveals a mixed performance across various domestic sectors during the period. The Finance Ministry highlighted several specific growth metrics in its report:

• Services activity strengthened in August, driven by stronger new business and employment.
• E-way bill generation and the manufacturing PMI grew more slowly.
• Electricity and fuel consumption registered healthy growth alongside sustained bank credit expansion.
• Automobile sales maintained healthy growth across both rural and urban markets.

Production of capital goods and infrastructure goods points to continued strength in the investment cycle. Monsoon conditions proved more favourable than anticipated, keeping kharif sowing close to last year’s levels across several crops.

Global Risks and Resilience

External risks persist as geopolitical tensions and the weaponisation of supply chains keep energy prices volatile and disrupt trade routes. Sustaining growth will require preserving macroeconomic stability and strengthening economic resilience.

• Japan Credit Rating Agency raised India’s sovereign rating from BBB+ to A- in September 2026.
• Industrial activity remained resilient, supported by manufacturing GVA growth and strengthening bank credit to industry.

Sustaining industrial momentum while increasing scale, domestic value addition, supply-chain depth, and export competitiveness will remain important for broadening the manufacturing base.