Mumbai (Maharashtra) [India], September 30 : India's economy is expected to grow at around 7.0 per cent in fiscal 2026-27, following a stronger 7.8 per cent growth in fiscal 2025-26, with the next phase of expansion likely to depend on infrastructure development, deeper capital markets and stronger financial intermediation, according to a report by S&P Global.
The report said India's economy significantly outperformed expectations in fiscal 2025-26 despite high US tariffs and global uncertainty. It said the strong growth reflected the strength of domestic economic drivers and India's ability to navigate an increasingly uncertain global environment.
However, growth is expected to moderate to about 7.0 per cent in fiscal 2026-27.
It said, “Growth is expected to moderate to about 7.0 per cent in fiscal 2026-27, as India's next phase of development will depend on how effectively it converts macroeconomic resilience into sustained momentum”.
Yann Le Pallec, President, S&P Global Ratings, and Chairman of the Board for Crisil, said India has a significant opportunity to build on its economic resilience by advancing the next phase of physical infrastructure development.
“India has a significant opportunity to convert macroeconomic resilience into sustained economic momentum. Our research suggests that the country can build on this momentum by advancing the next phase of physical infrastructure development, supported by competitive federalism, deeper capital markets and more robust financial intermediation,” Le Pallec said.
The report highlighted the expansion of India's capital market over the past decade, noting that the country has combined strong economic growth with a deepening listed equity market and a broad range of companies.
As of June 30, 2026, India's equity market stood at USD 2.03 trillion in investable market capitalisation.
At the same time, the report noted that a majority of actively managed Indian funds have underperformed their respective benchmarks across multiple market cycles and economic environments.
Infrastructure development is expected to remain an important part of India's next growth phase. The report linked this with the need for deeper capital markets and stronger financial intermediation to support sustained economic momentum.
The report also examined India's energy security as the country faces an uncertain global environment. More than half of India's crude imports move through the Strait of Hormuz, making the country exposed to disruptions in the key waterway.
S&P Global said India's energy resilience will require more than managing individual supply disruptions. It highlighted the need for diversified supply sources, integrated storage and strategic reserves for crude oil, refined products and, where feasible, gas.
The report also said India's next phase of energy transition will need to balance climate ambitions with the need for reliable and affordable electricity.