India growth resilient at 7.1% despite Middle East risks: S&P

India’s economic growth is set to remain resilient at 7.1% in FY27, as strong domestic demand, steady exports and improving private investment continue to underpin momentum, according to S&P Global Ratings.

In its latest Asia-Pacific outlook, the agency also revised FY26 growth upward to 7.6%, indicating a stronger base even as expansion moderates slightly next year. Despite geopolitical tensions in the Middle East and global trade uncertainties, India is expected to remain among the fastest-growing major economies.

S&P highlighted that robust consumption trends and a gradual recovery in private investment will help offset external headwinds, including commodity price volatility and potential disruptions to trade flows and capital movements.

Higher crude oil prices remain a key risk, potentially widening the trade deficit and putting pressure on public finances.

However, a strong services exports surplus and India’s diversified economic base are expected to cushion the impact on external balances. A full pass-through of rising fuel costs to consumers is also seen as unlikely, given policy interventions.