India’s economy is firing on all cylinders, and Morgan Stanley believes the momentum will propel growth beyond 6.5% in FY27, driven by powerful domestic and external demand signals. The firm’s latest report, unveiled Monday, paints a vivid picture of sustained acceleration.
Domestic consumption is rebounding sharply, as evidenced by resilient high-frequency metrics. Coupled with a supportive policy environment and macroeconomic steadiness, this sets the stage for outperformance. The report emphasizes that ‘policies geared towards growth will persist,’ bolstering investor confidence.
Globally, relief is in sight for exporters. Commodity shipments stand to benefit from slashed duty rates—down from 50% peaks—and a string of clinched FTAs, enhancing India’s competitive edge in international markets.
Fresh GDP revisions provide further encouragement. Real GDP and GVA both expanded 7.8% in FY26’s third quarter, edging down slightly from before. The switch to a 2022-23 base year modernizes data to mirror contemporary economic realities, including booming digital and informal segments.
Enhancements include double deflation methods, comprehensive supply-use tables, and novel data streams like GST revenues, EV sales, and PFMS records. These refinements lift FY26 growth projections to 7.6%, surpassing the prior 7.4% figure.
In essence, Morgan Stanley’s analysis highlights India’s structural strengths and policy agility, forecasting a growth story that could exceed projections and cement its status as an economic powerhouse.