World Bank raises India's growth forecast to 7.1%

The World Bank has raised its India economic growth forecast to 7.1%, from 6.6% projected in April, citing robust domestic demand and stronger exports despite global headwinds. India's growth accelerated to 7.8% in FY26 from 7.2% in FY25, supported by investment and private consumption. GDP also grew 7.8% in Q1 FY27, exceeding expectations. Why it matters Private consumption is expected to remain the main growth driver. Stronger-than-expected exports are identified as a key upside for the FY27 outlook, while industrial activity has also performed better than expected. Infrastructure and construction goods growth accelerated to 7.2% in Q1, while electricity-sector growth reached 9.3%, compared with a contraction in the corresponding period last year. However, the World Bank highlighted risks from global oil prices, El Niño, stock-market corrections and capital-flow volatility. A weaker agricultural outlook could also weigh on rural demand. Market view: The upward revision reinforces India's position among the fastest-growing major economies. Sustaining consumption, investment and export momentum will be important for corporate earnings and markets. What to watch: Private consumption, exports, industrial activity, monsoon conditions, crude prices, private investment and global capital flows. Learning outcome: GDP growth forecasts matter for markets, but investors should assess whether growth is translating into sustainable corporate earnings, investment and cash-flow expansion.