Business EconomyPosted at: Oct 29 2026 4:40PM

New Delhi, Oct 29 (UNI) India’s economy is estimated to have expanded by 7.35 per cent in the July-September quarter of FY27, according to the Finance Ministry’s latest nowcasting model.
The projection, published in the ministry’s monthly economic report on Thursday, points to sustained economic activity, supported by industrial production, higher energy consumption, increased port traffic, GST collections and automobile sales.
The estimate comes as major international and domestic institutions maintain a positive outlook for India’s economic growth. The International Monetary Fund (IMF) has projected growth of 7 per cent for FY27, while the World Bank, the Organisation for Economic Co-operation and Development (OECD) and the Reserve Bank of India (RBI) have forecast expansion of 7.1 per cent.
The Finance Ministry expects domestic consumption and investment to remain important drivers of growth in the coming quarters. Structural reforms, improving credit conditions and recently concluded trade agreements are also expected to support economic activity, the report said.
Recent changes to the Goods and Services Tax (GST) framework could further improve the business environment by simplifying compliance requirements and easing working capital pressures. These measures are expected to help businesses manage cash flows more efficiently and support investment and consumption demand.
The report also highlighted the role of healthy credit growth in sustaining economic momentum. Improved access to finance, combined with policy support and trade opportunities, could help businesses expand production and strengthen export activity.
India’s industrial sector is showing signs of resilience, with production levels, new orders, manufacturing sentiment and industrial credit providing support to the near-term outlook, according to the report.
However, maintaining this momentum will require businesses to convert improving demand and policy support into higher output, greater domestic value addition and stronger competitiveness in overseas markets.
The ministry also flagged uncertainties surrounding energy prices, supply chains and geopolitical developments, which could affect manufacturing costs and investment decisions. Volatility in global commodity markets remains a concern for industries that depend heavily on imported energy and raw materials.
Despite the positive domestic indicators, the report cautioned that external developments could pose challenges to India’s growth trajectory.
A potential slowdown in investment linked to artificial intelligence could affect international trade, particularly because such investments involve substantial imports of technology equipment and related goods. Any moderation in this activity could have implications for countries integrated into global manufacturing and technology supply chains.
The continuing crisis in West Asia is another source of uncertainty, with potential implications for energy prices and global inflation. Higher oil prices could increase input costs for Indian businesses, put pressure on inflation and affect household purchasing power.
The ministry’s assessment suggests that while domestic demand and industrial activity are providing support to the economy, sustaining growth will depend on managing external shocks and improving the competitiveness of Indian industry.
The coming quarters will therefore be important in determining whether strong domestic activity translates into sustained production growth, higher investment, and a stronger contribution from exports.
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