India’s Economic Survey projects GDP growth of 6.8–7.2% in FY27, after about 7.4% in FY26. The moderation reflects a high base rather than a loss of momentum. Global trade is slowing, tariffs are rising and geopolitical risks remain elevated, but the Survey argues that India’s growth cycle is now less dependent on external conditions.
The change is visible in the composition of growth.
Domestic balance sheets now matter more than global flows
The Survey says India’s medium-term growth potential has risen to around 7%, supported by four structural shifts:
- Lower corporate leverage
- Stronger bank capital positions
- Rising formal employment
- More stable and predictable tax collections
Growth is now supported by domestic financial conditions rather than by one-time policy measures or global liquidity.
Consumption has become the main driver
Household spending is now the primary source of economic momentum. While exports and capital flows remain volatile, domestic demand has stayed resilient. This reduces exposure to external shocks and allows growth to continue even when global conditions weaken.
For businesses, this shifts the focus from export cycles to domestic consumer trends.
External risks remain, but are no longer central
The Survey flags slower growth among trading partners, tariff risks and volatile capital flows as ongoing concerns. It also notes that India’s financial system and domestic demand base provide a degree of insulation that many emerging markets currently lack.
These are treated as external constraints rather than internal weaknesses.
Trade strategy is shifting
The Survey points to progress on:
- Trade negotiations with the United States
- The India–EU free trade agreement
- New supply chain partnerships
The aim is to reduce reliance on a small set of markets and limit exposure to policy shocks abroad.
AI is framed as economic infrastructure
The Survey outlines an AI strategy focused on:
- Application-led deployment
- Open and efficient systems
- Public datasets
- Affordable computing access
The emphasis is on using AI across finance, governance, healthcare, manufacturing and education, rather than on building large, energy-intensive models.
A phased approach to regulation
Instead of early, rigid regulation, the Survey proposes a sequence:
- Enable experimentation
- Build institutional and technical capacity
- Introduce binding rules
This reflects lessons from early adopters that faced high costs and energy constraints.
Inflation data needs careful reading
The Survey notes that a rebasing of the Consumer Price Index is expected. This could affect how inflation trends appear in future data and limit direct comparisons with earlier periods.
Deregulation is now an execution issue
The Survey argues that future growth depends less on new legislation and more on how rules are implemented. Faster approvals, clearer accountability and predictable enforcement are presented as the next productivity drivers.
The focus is on process reform rather than policy expansion.
Assessment
The Survey does not describe an economy accelerating, but one that is becoming more stable. Growth is supported by domestic balance sheets, household demand and institutional changes rather than external conditions. The policy emphasis is shifting from expansion to efficiency.