Global Markets
Home›Global Markets›India›West Asia tensions and monsoon uncertainty seen easing…
West Asia tensions and monsoon uncertainty seen easing India GDP growth
ICRA projects Q1 FY27 GDP growth at 7.0% year on year, with services growth slowing to 7.9% while industrial and agriculture remain comparatively resilient.
ICRA projects India’s year on year GDP growth to ease to a four-quarter low of 7.0% in Q1 FY27, down from 7.8% in Q4 FY26, citing tensions in West Asia and uncertainty tied to the monsoon season.
The rating agency expects the slowdown to be driven mainly by the services sector, which it projects will grow 7.9% in Q1 FY27 versus 9.9% in Q4 FY26. By contrast, ICRA forecasts the industrial sector to expand 7.7% compared with 7.3% last quarter, and agriculture to rise to 4.0% from 3.6%.
ICRA also cited the Reserve Bank of India’s August 2026 policy meeting projection of 6.7% GDP growth for FY27, with revised quarterly estimates for FY27 including 7.0% in Q1, 6.4% in Q2, 6.5% in Q3 and 6.8% in Q4. It projects real GDP growth for Q1 FY28 at 7.3%.
In its assessment, ICRA said high frequency indicators show healthy domestic volume growth across industrial and services, despite concerns about higher commodity prices linked to the West Asia conflict. The agency added that oil refining companies saw sizeable losses in Q1 FY27, which it said could weigh on gross value added growth, and estimated overall GVA growth at 7.2% in Q1 FY27 versus 7.9% in Q4 FY26.