Major global credit rating agencies and global institutions, including the Asian Development Bank (ADB), Moody's Ratings, and Fitch Ratings, have recently revised India’s growth outlook, significantly upgrading GDP growth forecasts for the current fiscal year (FY2026-27). ADB and Moody's elevated their growth projections to 7 per cent, while Fitch upgraded its estimate to 6.9 per cent. 

The major upgrades came after India posted a strong 7.8 per cent GDP growth rate for the first quarter of the current financial year (Q1 FY2), demonstrating remarkable economic resilience amid ongoing geopolitical tensions, higher crude prices and energy supply disruptions in the Middle East. 

Let’s understand why global agencies have been upgrading India’s growth forecast that they had lowered before.  

Why Global Agencies Upgrade India’s FY27 GDP Growth Forecast

Asian Development Bank Raises India’s GDP Forecast 

The Asian Development Bank (ADB) raised India's economic growth outlook to 7 per cent for the current fiscal year, up 0.4 per cent from the earlier 6.6 per cent projected in July, citing more than expected growth in the first quarter despite supply-side disruptions caused by the West Asia crisis.

"The revision reflects India's stronger-than-expected economic performance, with GDP expanding by 7.8 per cent year-on-year in the first quarter of FY2026 (2026-27), supported by robust investment demand, resilient consumption, and solid growth in manufacturing and service sectors," Asian Development said in its Outlook (ADO) September, the multilateral lender's report. 

Also Read: ADB Raises India's GDP Growth Forecast To 7% On Stronger-Than-Expected Q1 Performance

Why ADB Upgrades India’s GDP Growth Forecast

  • The Indian economy benefited from lower-than-expected supply disruptions, sustained capital inflows, and limited pass-through of higher input costs to consumer prices. These factors helped cushion the impact of the Middle East conflict.
  • ADB noted that strong infrastructure spending and growth-oriented fiscal and monetary policy are supporting the economy despite supply disruptions and high commodity prices. 
  • The service sector, coupled with AI-related investments, alongside improvements in agricultural productivity and steady manufacturing growth, will help the Indian GDP to attain sustained growth momentum through the fiscal year. 
  • Robust domestic demand is expected to remain the key engine for growth in FY27 despite the temporary impact of higher fuel prices and inflation. This will further be supported by robust tax collections, ADB said.

Fitch Ratings Upgrades GDP Growth Forecast to 6.9% 

Fitch Ratings upgraded India's GDP growth forecast to 6.9 per cent, from 6.4 per cent for FY27 on the back of strong economic growth in the June quarter and other resilience factors in the economy. 

Why Fitch Ratings Raises Growth Forecast

  • Fitch noted that a growth rate of 7.8 per cent in the June quarter indicates resilience in the face of trade deterioration caused by the shock from the US-Iran war in the Middle East. 
  • Fitch Ratings sees buoyancy in the nation’s private investment prospects, expecting investment to rise by more than 10 per cent. Additionally, the agency noted that non-food credit growth reached 19 per cent year-on-year in July.
  • Given the recent developments, the agency said that RBI may raise rates by 25 bp in October this year to 5.5 per cent. “We then expect a further rise to 5.75 per cent in early 2027 and then for rates to ease back to 5.5 per cent in 2028," Fitch noted.

Moody’s Gives A Sharp Upgrade To India’s Growth Rate 

Moody's Ratings sharply raised India's GDP growth forecast to 7 per cent for the current financial year– a per cent higher than its earlier projection of 6 per cent. 

Why Moody’s Upgrades India’s Growth Outlook 

  • The rating agency noted that India has shown resilience amid global shocks due to the Middle East conflict. However, Moody’s flagged inflation as the major risk due to elevated oil prices and the El Nino impact. 
  • Moody's said India's real GDP growth accelerated to 8.2 per cent year on year in the first six months of calendar year (CY) 2026 as compared to 7.3 per cent for the full year in CY 2025.  
  • The Indian economy has support from stronger private consumption, robust gross fixed capital formation and sustained strength in the services sector.
  • Moody’s noted that India is expected to grow faster than all other G20 economies. The nation will grow faster among similarly rated emerging markets.