Mumbai, April 8 The Reserve Bank projected India's GDP growth for the current financial year at 6.9 per cent, lower than the 7.6 per cent estimated for 2025-26, driven by concerns over elevated commodity prices and supply chain disruptions originating from the West Asia crisis.
Unveiling the first bi-monthly monetary policy for 2026-27, RBI Governor Sanjay Malhotra said that merchandise exports may be adversely impacted by disruptions in key shipping routes and the concomitant rise in freight and insurance costs.
On the other hand, sustained momentum in the services sector, the persisting impact of GST rationalization, rising capacity utilization in manufacturing, and healthy balance sheets of financial institutions and corporations should continue to support domestic demand, he said.
India's real GDP is estimated to grow by 7.6 per cent (year-on-year) during 2025-26, according to the Second Advance Estimates (SAE) of the new GDP series (base year 2022-23).
The Governor said that elevated energy and other commodity prices, coupled with supply shock due to disruptions in the Strait of Hormuz, would act as a drag on domestic production in 2026-27.
"Heightened volatility in global financial markets, with its spillover on domestic financial conditions, would weigh on growth prospects," Malhotra said.
He further said that the government's focus on scaling up domestic manufacturing in several strategic and frontier sectors, announced in the Union Budget 2026-27, bodes well for India's ensuing growth trajectory.
"Taking all these factors into consideration, real GDP growth for 2026-27 is projected at 6.9 per cent, with Q1 at 6.8 per cent; Q2 at 6.7 per cent; Q3 at 7.0 per cent; and Q4 at 7.2 per cent," Malhotra said.
He said that the outbreak of the conflict in West Asia has led to severe disruption of global supply chains and poses an unprecedented challenge for the global economy – higher prices and lower global growth.