India GDP likely grew 7% in Q1 FY27 amid Iran war impact

India's economic growth likely held above 7% in the first quarter of FY27, with an ET poll of 10 economists putting the median at 7.3%. The RBI has projected Q1 growth at 7%. The National Statistical Office will release official GDP data on August 31. ICRA estimates GDP growth eased to a four-quarter low of 7% from 7.8% in Q4 FY26, citing tensions in West Asia and monsoon uncertainty.

High frequency indicators showed healthy domestic volume growth, belying concerns of a fallout from higher commodity prices due to the Iran war, said ICRA's chief economist Aditi Nayar. However, oil refining companies experienced losses that impacted GVA growth. DBS Bank said corporate earnings were broadly constructive, though higher energy prices crimped profitability at oil marketing companies. The ET poll median for full-year FY27 GDP growth is around 6.8%.

Economists expect some moderation in Q2 and Q3 as the fallout of the Iran war feeds through. CareEdge has revised its FY27 growth forecast to 7% from 6.7%. DBS Bank sees an upside bias to its estimate. Weather-related and geopolitical uncertainties remain key risks. The World Bank and IMF peg India's FY27 growth at 6.6% and 6.4% respectively.