Indian Economy Projected to Grow Between 7-8% in April-June Quarter, Research Reports Indicate

The Indian economy is expected to have grown between 7 and 7.5 per cent during the April-June quarter (Q1) of Fiscal Year 2026-27, according to multiple research reports. Meanwhile, SBI research stands as an outlier, projecting the growth rate to touch 8 per cent.

The official gross domestic product (GDP) data will be released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday, August 31. During the preceding January-March quarter (Q4) of Fiscal Year 2025-26, the growth rate stood at 7.8 per cent, compared to 6.8 per cent in the April-June quarter (Q1) of FY26. Notably, Q1 of FY27 marks the first full quarter following the onset of the conflict in West Asia.

Barclays has estimated the Q1FY27 growth rate at 7.5 per cent. High-frequency activity indicators (HFIs) tracked for the April-June period showed better growth rates compared to the January-March quarter. Aastha Gudwani, India Chief Economist at Barclays, noted that out of 20 HFIs tracked, only seven saw year-on-year average growth rates slow down in Q1FY27 compared to Q4FY26. Indicators such as petrol, diesel, LPG demand, and fertiliser production faced slower growth due to stress from the West Asia conflict, while steel and two-wheeler production growth also moderated though remaining robust.

Bank of Baroda Economist Jahnavi Prabhakar projects India's GDP to grow by 7 per cent in Q1FY27, with a potential upside of 20 basis points. The agriculture sector is anticipated to register a growth of 3.5 per cent, down from 4.4 per cent in the corresponding period last year. This moderation is attributed to extreme heatwave conditions, El Nino prevalence, a delayed onset of the South-West monsoon, and lower reservoir levels during the quarter. However, the sector is expected to improve in subsequent quarters.

Prabhakar further stated that better industrial performance, steady improvements in government capital expenditure, and healthy credit and deposit growth will drive higher economic expansion. For the full fiscal year FY27, growth is projected between 6.6 and 6.8 per cent, depending on clarity regarding West Asia conflict resolution and the final kharif harvest outcome.

Conversely, SBI’s economic research report expects higher growth on both sequential and year-on-year bases, with an estimated Q1FY27 GDP growth of 8 per cent. Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI, stated that underlying momentum remains broad-based. SBI tracked over 50 leading indicators across consumption, demand, agriculture, industry, and services, with 86 per cent showing acceleration in Q1FY27 compared to 69 per cent in Q1FY26.

Ghosh added that consumption and demand continue to exhibit resilience. High-frequency demand indicators support the growth outlook, while industrial activity remains satisfactory outside of a few pockets, and services provide additional support to corroborate the 8 per cent growth estimate.

"These economic projections indicate underlying resilience in the Indian market despite external pressures such as the West Asia conflict and domestic agricultural headwinds like heatwaves. For entrepreneurs and investors in the startup ecosystem, steady consumer demand, resilient high-frequency indicators, and healthy credit growth provide a stable macroeconomic environment for scaling businesses and planning capital deployment in the coming quarters." — Dr. Shishir Gupta, Founder & CEO, StartupLanes