India's GDP Growth Forecast Raised To 7.1% By World Bank for FY27

The World Bank has raised its forecast for India’s economic growth in FY27 to 7.1%, up from its earlier estimate of 6.6%, as per news reports. The revision comes after the economy grew 7.8% in FY26, slightly higher than the Bank had previously estimated. 

For FY28, the World Bank expects growth to remain at 7.2%. It said domestic demand, along with activity in the industrial and services sectors, should support the economy. 

Industry and Services to Support Growth 

The World Bank expects domestic demand to remain an important part of India’s growth in FY27. Industry and services are also expected to contribute to the expansion. 

The report also pointed to labour code consolidation, GST reforms, tariff rationalisation, the Insolvency Act and continued investment in physical and digital infrastructure as factors that could support growth over the longer term. 

India Drives South Asia Growth 

India’s outlook also has a major bearing on the wider South Asian region. The World Bank has projected regional growth of 6.9% in 2026 and 6.7% in 2027. 

The picture changes sharply when India is excluded. Growth in the rest of South Asia is projected at 3.6% in 2026 and 3.8% in 2027. 

AI Use is Growing, But Adoption is Still Limited 

The report also looked at how Indian businesses are using artificial intelligence. Around 23.4% of formal firms in India currently use AI, compared with 42.7% in the US. 

There is also a wide gap in paid AI adoption. Only 3.5% of Indian firms reported paying for AI software or subscriptions, against 23.1% in the US. 

Better digital infrastructure and skills could help narrow this gap. Around 72% of Indian firms said improved digital infrastructure would encourage greater AI use, while 55% pointed to tertiary education. 

Agriculture Remains a Risk 

Agriculture is one area that could put pressure on the growth outlook. India recorded its fourth-driest June-August period since 1960, according to the report. 

A larger-than-expected monsoon deficit could affect farm output and rural demand, while also adding pressure to food prices. Stronger activity in industry and services could provide some support if agriculture weakens. 

Read More: India Services PMI Rises to 55.2 in September 2026 as Demand Improves! 

Conclusion 

The World Bank’s FY27 forecast is now higher at 7.1%, although the report continues to flag agriculture and India’s still-developing AI adoption as areas to watch. 

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