Winning Bizness Desk
India’s GDP Forecast to Grow to 6.8 Per Cent in FY 27: Ind-Ra
India Ratings and Research (Ind-Ra) has upped its real Gross Domestic Product (GDP) growth forecast for this financial year (FY 27) by ten basis points (bps) to 6.8 per cent. In May, Ind-Ra had forecast the country’s GDP growth at 6.7 per cent for FY 27.
A basis point is a standard unit of measure used in finance to express the percentage change in financial rates or values, equal to one-hundredth of one per cent (0.01 per cent).
Lower crude oil price is one reason for Ind-Ra to up its GDP growth forecast. However, the agency said that an El Nino weather pattern and geo-political developments could create problems for economic momentum.
“The downside risks to GDP growth in FY 27 include geo-political developments, particularly the unresolved West Asia conflict, high headline inflation, a depreciated currency, weak global trade growth, strong GDP growth in FY 26—the base effect, and notably the likely El Nino weather pattern and the recent US government announcement of levying 100 per cent tariff on India for buying Russian crude,” Ind-Ra said in its mid-year economic outlook report.
While the rating agency lowered its baseline crude oil price assumption for FY 27 to USD 85 a barrel from its earlier forecast of USD 95, it pointed to severe weather risks, especially El Nino, as a leading constraint on agricultural production and headline consumer prices.
“The weak monsoon is already affecting food prices and consumer food prices inflation. An adverse base effect would continue to push up food inflation at least until October 2026,” Ind-Ra said.
On inflation, it projected the Wholesale Price Index (WPI) inflation to climb northward steeply to 8.5 per cent in FY 27 from the 0.4 per cent of the last financial year (FY 26). The forecast for Consumer Price Index (CPI) inflation is an average of around 4.9 per cent.
According to the rating agency, retail inflation is expected to peak at 5.9 per cent in the third-quarter of this fiscal (Q3 FY 27) before sliding to five per cent in the fourth-quarter (Q4) of this fiscal.
Private consumption expenditure is expected to expand slower than last fiscal—at 7.2 per cent this year as compared to 7.7 per cent in FY 26.
The reasons for this slower growth, according to Ind-Ra are higher inflation, sluggish demand in urban areas and weaker rural incomes due to the impact of El Nino on agricultural output combined with external risks which are likely to remain high.
India’s Russian Crude Oil Imports at Record High in July
The country’s crude oil imports from Russia hit a record in July of this year in value terms at around USD 6.4-billion. This number is equivalent to approximately Rs 61,000-crore and overtakes the previous month’s (June) high of USD 5.14-billion.
The Centre for Research on Energy and Clean Air (CREA), a Finland-based entity, said that India registered its highest level of imported Russian crude ever even as Russia’s oil products exports stood at an all-time low.
An important point that needs highlighting here is that since tensions peaked in the Gulf region and the closure of the Strait of Hormuz and increasing disruptions in the Bab-el-Mandeb Strait, Russia has become India’s biggest energy security hedge.
CREA said that in July, for the second consecutive month, the country’s imports of crude oil from Russia climbed up by 2.1 per cent on a Month-on-Month (MoM) basis to reach a record high, valued at USD 5.5-billion.
An important point to note here is that this increase was propelled by terminals other than the two largest ones (Jamnagar, belonging to the Mukesh Ambani-spearheaded Reliance Industries) and Paradip (of the public sector major Indian Oil Corporation).
According to CREA, imports moved northward by 58 per cent at the HPCL Mittal Energy (HMEL), Mundra.
At the Indian Oil Vadinar SMPL, imports climbed up by 35 per cent while at Mumbai too there was a 37 per cent increase. The number slid by 22 per cent at Paradip while it remained unchanged at Jamnagar.
In July of this year, Russian oil products export loadings declined 23 per cent to 4.7-million tonnes, the country’s lowest level on record. A point of interest here is that this is also less than half of the 9.6-million tonnes loaded in the year-ago month (July 2025).
India’s Real Estate Sector Resilient Despite the West Asia War
The country’s real estate sector has remained resilient amid the West Asia crisis with capital inflows of USD 3.5-4-billion in the first-half of this year, according to credit rating agency CareEdge.
This was backed up by sustained demand and deleveraged developer balance-sheets and strong institutional participation, the agency said.
“While the geo-political situation in West Asia remains a key monitorable, the near-term impact on the Indian real estate sector is expected to remain limited”, Ms Rajashree Murkute, senior director at CareEdge Ratings was quoted in a leading newspaper as saying.
An important highlight here is that office leasing exhibited resilience due to demand from Global Capability Centres (GCCs). Additionally, industrial and warehousing also continued to grow on a strong structural base.
Affordable housing and project execution, however, faced cost pressures, the rating agency said.
It also pointed to an expansion in the sector and housing demand across Tier-1 and emerging Tier-II and Tier-III locations propelled by urbanisation, infrastructure development, GCC expansion, manufacturing investment combined with government initiatives such as the Pradhan Mantri Awas Yojana-Urban 2.0 (PMAY-U20).
CareEdge said that it expected residential unit sales in the country’s top six cities to remain healthy at around 3.55-lakh units.
However, consistently high oil prices could push up costs by around 2-3 per cent. If this happens, then projects costs will increase and developer margins will narrow, especially for projects in the initial stages of construction, the rating agency pointed out.
CareEdge said that in the premium and luxury housing segment, it expected demand to remain resilient, supported by HNIs, NRIs and affluent domestic buyers. However, the affordable housing segment could likely be more affected by geo-political shocks, the rating agency said.
Sugar Prices to Reduce, No Shortage: ISMA
The Indian Sugar Mills Association (ISMA) has said that there is no shortage of sugar in the country. The industry body also stated that retail market prices of the commodity are expected to reduce going forward.
“India does not have a sugar shortage,” the Indian Sugar Mills Association’s President Mr Niraj Shirgaokar told journalists at a press conference vey recently.
Prices of sugar had moved northward due to various factors including speculative buying by traders and bulk consumers, he said, adding that bad weather conditions had also contributed to the price rise as there was lower production because of the weather conditions.
The commodity’s prices have started to slide because of the government’s decision to allow duty-free imports of one-million tonnes of raw sugar.
Mr Shirgaokar also denied that mills were involved in creating artificial scarcity and pushing up the ex-mill prices of the commodity.
The closing stock of sugar as at end-September would be 35-lakh tonnes, the ISMA President said, adding that the mills would commence operations by mid-October. The production in October would be around 10-12-lakh tonnes, he said.
On demand in October, Mr Shirgaokar pointed out that it would be 24-25-lakh tonnes.
