Icra Cuts India’s FY27 GDP Growth Forecast to 6.2% As West Asia Crisis Spikes Crude Prices
Commenting on the analysis, Icra chief economist Aditi Nayar said that Icra now assumes crude oil prices to average at $95/bbl in FY27
New Delhi: Domestic rating agency Icra on Tuesday projected that India’s economy is likely to grow at 6.2 per cent in FY27, down from the earlier estimate of 6.5 per cent amid elevated crude oil prices triggered by the West Asia crisis.
“For FY26, the estimated GDP growth is seen at 7.5 per cent, marginally lower than the National Statistical Office's (NSO) Second Advance Estimate (SAE) of 7.6 per cent for the fiscal,” Icra said in a statement.
Commenting on the analysis, Icra chief economist Aditi Nayar said that Icra now assumes crude oil prices to average at $95/bbl in FY27, against our prior estimate of $85/bbl, given the ongoing stickiness in prices amid the stalemate in West Asia. “Consequently, we have pared our baseline forecast for the FY27 GDP growth (at constant 2022-23 prices) to 6.2 percent from the 6.5 per cent expected earlier,” she said.
The rating agency also said that the GDP growth in the fourth quarter is expected to ease to a three-quarter low of 7 per cent from 7.8 percent in Q3 of 2025-26. A slower expansion across the industrial and services sectors is expected to have moderated GDP growth between these quarters, even as the performance of the agriculture sector is likely to have improved slightly.
“However, a slower rise in manufacturing volumes, contraction in exports, and nascent signs of margin pressure amid the West Asia fallout may have weighed on the industrial gross value added (GVA) growth performance in the quarter,” Nayar said.
“Consequently, we expect the GDP growth to have slowed to a three-quarter low of 7 per cent in Q4 2025-26, below the NSO's implicit estimate of 7.3% for the quarter, while remaining quite robust,” she added.
