India's macroeconomic outlook relatively resilient West Asia risks remain ITC
ITC Ltd. projects India’s economy to grow at 6.9% in FY27, citing structural drivers like demographics and trade deals, but warns West Asia conflict and El Niño risks could disrupt growth, inflation, and energy security. The country recorded 7.6% GDP growth in FY26, driven by domestic demand and policy measures, though inflation rose in the second half due to food and global energy price spikes.
India’s economic growth outlook remains ‘relatively resilient’ with a projected 6.9% expansion in FY27, according to conglomerate ITC Ltd. The company cited Reserve Bank of India (RBI) estimates, highlighting structural strengths such as a favorable demographic profile, rising affluence, urbanization, digital adoption, and improved infrastructure as key growth drivers. Recent bilateral trade agreements with the US, UK, EU, New Zealand, and Oman are expected to further bolster India’s economic momentum. However, risks persist, including disruptions from the West Asia conflict, which threatens energy security and imported inflation, and potential El Niño conditions that could weaken monsoons and exacerbate heatwaves. These factors may impact consumer sentiment, demand, and the current account balance, requiring close monitoring. In FY26, India maintained its status as one of the fastest-growing major economies, with real GDP growth of 7.6%, supported by private consumption, tax cuts, GST rationalization, and monetary easing. Inflation trends showed volatility, with headline inflation easing in the first half due to benign food prices from higher domestic production and favorable monsoons. However, inflation rose to 3.4% in March 2026, driven by food price increases and higher global energy costs linked to West Asia disruptions. ITC’s financial performance in FY26 reflected this growth, with gross revenue reaching Rs. 80,867.49 crore (up 10.1%) and EBITDA increasing by 4.9% to Rs. 25,208.22 crore.
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