India’s economy is estimated to have grown by 7.35 per cent during the July-September quarter of FY27, supported by steady domestic demand, stronger industrial performance and rising consumer spending. The projection was included in the Ministry of Finance’s October Monthly Economic Review, released on Thursday.
The latest estimate is slightly higher than the ministry’s earlier projection of around 7.3 per cent in its September review. It follows economic growth of 7.8 per cent in the April-June quarter of FY27.
India’s Latest GDP Growth Estimate
The Department of Economic Affairs has used its nowcasting model, introduced in the Economic Survey 2025-26, to assess economic performance during the second quarter.
Based on this model, real GDP growth for Q2 FY27 is estimated at 7.35 per cent. The projection reflects continued economic activity despite challenges in the global environment.
The International Monetary Fund has forecast India’s growth at 7.0 per cent for FY27. Meanwhile, the World Bank, OECD and Reserve Bank of India have each projected growth of 7.1 per cent.
Industrial Activity, GST Collections and Auto Sales Support Growth
The Finance Ministry’s review pointed to improved performance across several economic indicators during July-September. These included industrial production, electricity consumption, port traffic, GST revenue and automobile sales.
Gross GST collections increased by approximately 15 per cent in the second quarter, compared with growth of around 8.4 per cent in the previous quarter. Domestic automobile sales also rose by nearly 25 per cent year-on-year, reflecting demand from both rural and urban markets.
Business activity gained strength towards the end of the quarter. Manufacturing and services sectors showed improvement in September, while purchasing managers’ index (PMI) readings and business sentiment also indicated a more favourable outlook.
What Could Support India’s Economy in the Coming Months?
According to the review, domestic consumption, investment activity and structural reforms are expected to remain important drivers of growth during the rest of FY27.
Healthy credit growth and recently signed trade agreements could provide further support to consumer spending, investment and exports.
However, the ministry also highlighted risks that may affect the economic outlook. Higher crude oil prices, geopolitical tensions and inflationary pressures remain key concerns amid continuing global uncertainty.
Disclaimer: This article is based on estimates and projections cited in the Ministry of Finance’s October Monthly Economic Review. GDP growth figures are estimates and may be revised as additional data becomes available. Forecasts from international institutions and other authorities are projections, not confirmed outcomes.