India likely to grow 7% in FY27 on domestic demand, investments; inflation to remain in range: EAC-PM chairman Dev

Subscribe to enjoy similar stories.NEW DELHI: The West Asia war is likely to have a limited impact on India’s economy and although inflation could accelerate from the level in March, it will stay within the central bank’s tolerance range, S. Mahendra Dev, chairman of the Economic Advisory Council to the Prime Minister, said in an interview.The economy is likely to expand 7% this year, and the Iran war has re-emphasized the need for faster diversification of energy sources, Dev said.Atmanirbharta or self-reliance is at the centre of India’s strategy to navigate a global environment riddled with economic choke points, Dev said.Dev said the economy’s resilience in the face of headwinds generated by the West Asia war could be demonstrated by the narrowing of India’s trade deficit to $20.67 billion in March.“This shows that the impact of the war is being mitigated by a good export performance to a diversified set of markets.

Oil prices remain elevated but are off their March highs. Growth is likely to remain around 7%.

However, this would also depend upon how long the conflict lasts,” Dev said. “The inflation environment was benign domestically and this provides some buffer to absorb rising costs of energy, especially oil.”Dev’s outlook of 7% real GDP growth compares with the Reserve Bank of India’s projection of 6.9% on 8 April and the International Monetary Fund’s 6.5% forecast earlier this month.

The Economic Survey presented in January projected a 6.8-7.2% growth for FY27.“India’s exposure to geopolitical shocks is relatively contained as economic growth is anchored primarily in domestic consumption and investment rather than external demand. This resilience is further reinforced by proactive policy interventions.