In its Economic Outlook Interim Report for September 2026, the OECD said that while many economies have mitigated the fallout from the West Asia crisis through rapid artificial‑intelligence‑related investment, India’s growth was chiefly buoyed by resilient domestic demand and supportive government policies that insulated households and firms from higher energy prices.
The OECD cautioned, however, that growth is expected to decelerate in the second half of the fiscal year, forecasting a drop from 7.8% in 2025‑26 to 7.1% in 2026‑27 and further to 6.5% in 2027‑28 as reduced purchasing power takes its toll before a gradual recovery in 2027.
S&P Global followed suit on Tuesday, lifting its 2026‑27 growth estimate for India to 7% from 6.6%. The agency attributed the upgrade to robust industrial activity, healthy consumer spending, strong goods exports and accelerating government investment, but warned that the tailwinds from Goods and Services Tax rationalisation and income‑tax cuts are likely to fade, and that below‑normal monsoon rains could keep agricultural output and food inflation in focus.
Fitch Ratings also revised its outlook, raising the 2026‑27 forecast to 6.9% from 6.4%, echoing the view that domestic economic resilience underpins the upgrade while acknowledging a slowdown in the year’s second half.
Moody’s Ratings, meanwhile, moved its projection for the same period up to 7% from 6%, citing India’s demonstrated resilience to the global shock stemming from the Middle‑East conflict as the key driver of the upward revision.
Together, the four institutions highlight a broader trend among G20 emerging markets such as Indonesia and Brazil, where strong internal demand and policy support are offsetting external pressures. The OECD noted that AI‑driven investment and production have helped many countries blunt the impact of the West Asia crisis, a factor that also benefits India’s growth trajectory.
Analysts say the series of upgrades could lift investor confidence and encourage further capital inflows, but the projected slowdown in the latter half of the fiscal year underscores the need for vigilance on consumption trends, weather‑related agricultural risks and the sustainability of fiscal stimulus.