New Delhi [India], October 16 (ANI): India's economy is expected to grow by 7.1–7.3 per cent in FY 2026–27 and 6.6–7.0 per cent in FY 2027–28, according to Deloitte India's latest economic outlook, which said a sustained revival in private investment would provide an additional source of demand and help build the country's productive capacity.
The report said India's growth over the past decade has been supported by household spending and public investment in infrastructure. However, private investment has taken longer than expected to pick up despite improvements in connectivity, business conditions and corporate balance sheets.
Rumki Majumdar, Chief Economist at Deloitte India, said businesses now have better connectivity, healthier balance sheets and higher capacity utilisation, strengthening the case for expansion.
She said, “Over the past decade, India’s growth has rested on resilient household spending and a sustained push in public infrastructure. Businesses now have better connectivity, healthier balance sheets, and higher capacity utilisation, which are strengthening the case for expansion. The question is whether these conditions will encourage private investment to play a larger role in boosting growth in the coming year”.
She added that recent indicators offered grounds for optimism, with gross fixed capital formation growing by 11.9 per cent in the first quarter of FY 2026–27, its fastest expansion in four years.
According to the report, capacity utilisation has averaged above 75.7 per cent for six consecutive quarters. As spare capacity declines, companies have a stronger reason to invest in new facilities and equipment.
The report also said credit growth in industry has touched an all-time high of 20 per cent, while micro, small and medium enterprises (MSMEs) are seeing faster growth in credit demand.
Capital goods production, machinery orders and equipment purchases are providing further signs that some investment decisions are moving towards implementation.
The sectoral mix of investment is also broadening, with information technology emerging as another contributor alongside energy, resources and industrials.
Majumdar said investment in strategic sectors such as semiconductors, electronics, defence manufacturing, clean energy and AI infrastructure could add to the momentum because these sectors require substantial upfront investment.
“A durable revival will add to India’s capacity creation and support employment and productivity,” she said.
However, Deloitte said geopolitical tensions, energy-price volatility and trade disruptions remain risks to the economic outlook.
It also noted that companies have delayed major investment decisions in recent years because of global shocks, commodity price fluctuations, shipping disruptions and uncertainty over tariffs.
The report said faster land acquisition, predictable approvals, reliable utilities and effective contract enforcement would be important to turn investment decisions into operational projects.
It also highlighted the role of state and local governments in improving the investment process. Better logistics networks and access to ports could help build industrial clusters connecting manufacturers with suppliers, skilled workers, research institutions and export markets. (ANI)
India GDP to grow 7.1–7.3% in FY27, private investment revival to provide additional demand: Deloitte
