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ICRA lowers India’s GDP growth estimate to 6.2% for FY27 amid elevated crude oil prices

19 May 2026 Evaluate

Citing elevated crude oil prices driven by the ongoing West Asia crisis, rating agency ICRA has lowered India’s Gross Domestic Product (GDP) growth estimate (at constant 2022-23 prices) to 6.2% for fiscal year 2026-27 (FY27) from the earlier estimate of 6.5%. As per the rating agency, crude oil prices are expected to average at $95/bbl in FY27, against its prior estimate of $85/bbl, given the ongoing stickiness in prices amid the stalemate in West Asia. 

Besides, the rating agency has estimated GDP growth at 7.5% for FY26, marginally lower than the National Statistical Office's (NSO) Second Advance Estimate (SAE) of 7.6% for FY26. It also said GDP growth in Q4FY26 is likely to ease to a three-quarter low of 7% from 7.8% in Q3FY26. It noted that a slower expansion across the industrial and services sectors is likely to have moderated GDP growth between these quarters, even as the performance of the agriculture sector is likely to have improved slightly.

However, it said a slower rise in manufacturing volumes, contraction in exports, and nascent signs of margin pressure amid the West Asia fallout may have weighed on the industrial gross value added (GVA) growth performance in the quarter. Meanwhile, slowing global growth and shipping disruptions triggered by the West Asia conflict weighed on India's merchandise exports in the March quarter of FY26, which fell by 2.8% on a Y-o-Y basis, after a modest 1.4% rise in the December quarter.

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