Deloitte India upgraded its growth projection for the Indian economy to 7.1-7.3 per cent in financial year 2026-27 (FY27), up from 6.5-6.8 per cent earlier, citing sustained private demand. However, geopolitical tensions, resultant trade disruptions and energy price volatility remain risks to the growth forecast, according to the accounting and consulting major.
“Private investment tends to strengthen when firms see sustained demand, a need to expand capacity, and access to finance. Recent indicators suggest these conditions are beginning to align in India,” Deloitte said in its report. It highlighted that capacity utilisation has averaged above 75.7 per cent for six consecutive quarters, which is likely to reduce spare capacity and incentivise firms — with healthier balance sheets — to invest.
Gross fixed capital formation grew by 11.9 per cent in the first quarter of FY27, its fastest expansion in four years, the report noted.
Rumki Majumdar, economist, Deloitte India, said, “Over the past one decade, India’s growth has rested on resilient household spending and a sustained push in public infrastructure. Businesses now have better connectivity, healthier balance sheets, and higher capacity utilisation, which are strengthening the case for expansion. The question is whether these conditions will encourage private investment to play a larger role in boosting growth in the coming years.”
Notably, earlier this month, Finance Minister Nirmala Sitharaman emphasised that raising both the scale of investment and private sector participation is essential to strengthening the country’s innovation capacity.
In its September bulletin, the Reserve Bank of India estimated private sector capex at Rs 3.2 trillion for FY27, compared with Rs 2.6 trillion in FY26. The aggregate cost of projects reached a record Rs 4.4 trillion in FY26, up from Rs 3.7 trillion in FY25.
New private projects — up 70.6 per cent over Q4FY26 levels — led the overall increase in the country’s fresh investment plans in the first quarter of 2026-27 (Q1FY27). However, Business Standard reported in August that barring the four large nuclear power projects worth Rs 6.5 trillion announced in Maharashtra this May, overall fresh investment plans declined 4.27 per cent quarter-on-quarter (Q-o-Q) to Rs 8.27 trillion in Q1FY27 from Rs 8.63 trillion in Q4FY26, with private investments dropping 31.88 per cent sequentially.
Majumdar said that investments in strategic sectors, while needing substantial upfront investment, suggest that acceleration may extend beyond a single quarter.
The report mentioned faster land acquisition, predictable approvals, reliable utilities and effective contract enforcement as enablers for investment decisions to translate into operational projects. It further called for building industrial ecosystems around the country’s infrastructure alongside deeper capital markets and greater institutional participation.
