India Ratings & Research forecasts a slowdown in India's GDP growth rate to 6.8% in the current fiscal year. This forecast is slightly higher than the 6.7% the company projected in May.
According to the report, the slowdown is linked to risks stemming from the uncertainty of the conflict in the Middle East, currency volatility, and the potential impact of the El Niño phenomenon on agriculture. These factors are leading to an increase in inflation for fuel and food prices.
Earlier this month, the Reserve Bank of India (RBI) had raised its growth projections from 6.6% to 6.7%, citing the resilience of the domestic economy.
The agency conducting the sovereign rating now estimates the average crude oil price at $85 per barrel for the 2027 fiscal year, compared to $95 per barrel in May 2026. The rupee-to-dollar exchange rate is also expected to average 93.98 rupees (against 94.28 rupees in May 2026), indicating a 6.4% annual depreciation.
Fitch Group's subsidiary, Ind-Ra, estimates capital inflow of $70 billion through External Commercial Borrowings (ECB) and Non-Resident (Bank) (FCNR B).
Ind-Ra stated that the lower GDP growth rate in the 2027 fiscal year compared to the 2026 fiscal year is attributed to higher inflation in fuel and food prices, driven by the uncertainty of the Middle East conflict, currency weakening, and the potential impact of El Niño on the agricultural sector.
The agency presented quarterly GDP growth forecasts of 6.9%, 6.6%, 6.7%, and 6.9% for the periods April-June, July-September, October-December, and January-March, respectively. These figures differ from the RBI's forecasts: 7%, 6.4%, 6.5%, and 6.8%.
Economists' Comments
Devendra Pant, Chief Economist and Head of Sovereign Finance at Ind-Ra, noted that the average price of India's oil basket was $101.31 per barrel in the June 2027 fiscal quarter and $96.49 per barrel in April-July 2026.