India’s economy set for 7-7.2% growth in FY27 despite global headwinds: EY

India’s economic engine is expected to stay firmly on track in FY27, with real GDP growth projected at 7-7.2%. The growth comes on the back of strong domestic demand and continued government spending on capital projects supporting economic activity, EY said in a recent report.The firm has pegged nominal GDP growth at 12.5-13%, saying that India's growth prospects remain relatively strong even as geopolitical uncertainty, high crude oil prices and a weaker global trade environment pose challenges.Industrial activity picks up paceA stronger performance by the industrial sector has added to the growth outlook. India's Index of Industrial Production (IIP) expanded 7.3% in June 2026, its fastest pace in 23 months. Industrial growth averaged 5.7% during the first quarter of FY27, marking its strongest performance in eight quarters.Manufacturing was a key contributor, with output increasing 7.8%.