Finance Ministry projects 7.3% Q2 FY27 growth, warns of geopolitical headwinds

The finance ministry’s newest Monthly Economic Review projects a 7.3% growth rate for India in the September quarter of FY27, down from a 7.8% expansion in the June quarter. It attributes the continued momentum to strong early-quarter indicators and better-than-expected monsoon rains that should boost Kharif output and rural demand. Nonetheless, the report cautions that escalating geopolitical polarisation, supply-chain weaponisation and volatile oil prices pose external risks, while rising global interest rates could dampen capital flows.

The ministry calls for a shift toward a more competition-friendly economy and stresses the need for swift, high-quality policy decisions to reassure investors. It also notes that, at one outlet export pace, India could near a $1 trillion trade value for the full fiscal year, though trade ties with the United States remain uncertain.