The consulting firm expects GDP growth to moderate to 6.6-7.0% in FY28, while cautioning that geopolitical tensions, fluctuations in energy prices and disruptions to global trade could weigh on the country’s economic prospects.
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Deloitte said improving corporate balance sheets, higher capacity utilisation and better infrastructure connectivity have created favourable conditions for businesses to increase capital expenditure, potentially adding another driver to India’s economic growth.
Private investment, in particular, is emerging as an important factor in sustaining economic momentum after years in which household consumption and government-led infrastructure spending accounted for much of the expansion.
“The question is whether these conditions will encourage private investment to play a larger role in boosting growth in the coming years. Recent indicators offer grounds for optimism. Gross fixed capital formation grew by 11.9 per cent in the first quarter of FY 2026-27, its fastest expansion in four years,” said Deloitte India economist Rumki Majumdar.
The report highlighted the potential for investment in sectors such as semiconductors, electronics, defence manufacturing, clean energy and artificial intelligence infrastructure to accelerate private capital expenditure. These industries require substantial initial investments and could contribute to expanding India’s productive capacity over the longer term.Also Read: India’s current account deficit narrows to $5.2 billion in August as capital account surplus hits $50.6 billion
Deloitte’s growth forecast is broadly aligned with estimates from other major institutions. The Reserve Bank of India (RBI) and the Organisation for Economic Co-operation and Development (OECD) have projected GDP growth of 7.1% for FY27, while the International Monetary Fund (IMF), Asian Development Bank (ADB), S&P Global Ratings and Moody’s expect growth of 7%.
The report, however, noted that a durable recovery in private investment would be essential to strengthening domestic demand and supporting future economic expansion, particularly amid uncertainties surrounding global trade and energy markets.
“India has improved many of the business conditions needed to expand. Turning those improvements into sustained private investment now depends on how confidently firms can plan, finance, and execute their next projects,” Majumdar added.