India's GDP Growth Forecast for 2026-2027: A Resilient Economic Outlook

India's Economic Growth Projections

According to a recent report by EY India, India's GDP is anticipated to expand between 6.8% and 7.2% during the financial year 2026-2027. This projection underscores India's strategic economic positioning and the impact of well-calibrated reforms, which are fostering a more resilient growth trajectory despite ongoing global challenges such as tariff disputes and oil market fluctuations.

A significant factor influencing EY's optimistic outlook is India's growing network of bilateral trade agreements with prominent global economies and economic blocs. These agreements are enhancing India's market access, fortifying supply chains, and restoring its export competitiveness. D K Srivastava, Chief Policy Advisor at EY India, remarked, “With India's extensive bilateral trade agreements, the medium-term outlook for the country has improved significantly.”

The report emphasizes that these trade agreements are not only bolstering India's external sector but also contributing to its broader developmental goals by integrating the economy more closely with global markets.

Fiscal Reforms and Economic Aspirations

Furthermore, the report links India's growth trajectory to its long-term vision of becoming a developed nation by 2047, as outlined in the Viksit Bharat mission. To reach this goal, a steady increase in the tax-to-GDP ratio is essential. However, the report suggests that future progress will depend more on enhancing tax compliance rather than implementing drastic structural changes, as most significant tax reforms have already been enacted in recent years.

Key strategies will include strengthening enforcement, broadening the tax base, and improving administrative efficiency. In the financial year 2025-26, the central government introduced substantial modifications to the personal income tax and Goods and Services Tax (GST) systems, which involved sacrificing some potential revenue to boost disposable incomes and encourage private consumption.

Although gross tax collections are expected to fall short of the FY26 budget targets due to these recent concessions, the report indicates that confidence in fiscal management remains strong.