India economy projected to grow 7% in FY27 amid strong manufacturing

India is projected to maintain strong economic momentum, with S&P Global forecasting GDP growth of approximately 7 per cent for fiscal year 2026-27. This follows a stronger-than-expected 7.8 per cent expansion in the first quarter of the current fiscal year. Growth is expected to be driven by resilient domestic demand, government infrastructure investment, and steady consumer spending.

In the manufacturing sector, government data from the Annual Survey of Industries shows robust performance for fiscal year 2024-25. Industrial output grew by 7.81 per cent, while total employment in the registered manufacturing sector increased by 7.19 per cent. Key industrial hubs include Tamil Nadu, Gujarat, and Maharashtra, with sectors such as basic metals, motor vehicles, and chemicals contributing significantly to the Gross Value Added.

Despite the positive outlook, some financial analysts note valuation concerns. DBS reports that Indian stocks appear expensive compared to other Asian markets, citing a forward price-to-earnings ratio of 21.1 times, which is significantly higher than the 11.7 times seen in Asia ex-Japan.