India nearing 8% growth as reforms build resilience, says Shaktikanta Das

India is closing in on an 8 per cent growth rate as structural reforms have strengthened the economy’s resilience to global shocks, Shaktikanta Das said.

Das, Principal Secretary-2 to Prime Minister Narendra Modi, said India’s recent growth performance showed the economy had developed stronger buffers against external disruptions after a decade of reforms.

His comments come after India’s real GDP grew 7.8 per cent in the first quarter of 2026-27. Growth over the four quarters from July-September 2025 to April-June 2026 averaged slightly above 8 per cent, according to Das.

“This resonates with my statement to Financial Times London a few months ago that India is within a striking distance of 8 per cent growth,” Das said at the Kautilya Economic Conclave.

Reforms strengthen resilience

Das attributed the economy’s resilience to a series of reforms carried out over the past decade. These included the shift to flexible inflation targeting, the Goods and Services Tax, fiscal consolidation, digital payments and reforms in the banking sector.

He said the reforms had helped create buffers that allowed India to withstand global disruptions while maintaining relatively strong domestic growth.

The banking system has also become more resilient. Das said gross non-performing assets had fallen to 1.68 per cent in June 2026, while bank profitability had improved significantly.

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India’s external sector has provided another layer of support. Strong services exports, remittances, export diversification and a sustained services trade surplus have helped the economy manage external pressures, he said.

The resilience has been tested by a series of global shocks in recent years, including the Covid-19 pandemic, supply-chain disruptions, geopolitical tensions and volatility in energy markets.

Growth outlook

The latest growth forecasts, however, suggest that maintaining an 8 per cent pace will remain a challenge.

Allianz Research expects India’s economy to grow 7.5 per cent in 2026, before moderating to 7.1 per cent in 2027 and 6.8 per cent in 2028.

India is still expected to remain among the fastest-growing major economies. But the forecast points to a gradual slowdown as inflationary pressures increase and monetary conditions tighten.

Allianz expects consumer price inflation to rise from 4.7 per cent in 2026 to 5.2 per cent in 2027 before easing to 4.2 per cent in 2028.

The research firm expects India, along with South Korea, to enter a monetary tightening cycle in the fourth quarter of 2026. It said monetary policy would remain sensitive to energy and food prices as well as currency pressures.

The outlook highlights the difference between India’s current growth momentum and the challenge of sustaining it over several years.

What comes next

Das said the next phase of India’s growth would require continued reforms and investment in areas that can raise productivity and expand the economy’s capacity.

He identified artificial intelligence, deeper financial markets, strategic self-reliance, sustainability and human capital as key areas for the next stage of development.

AI could improve productivity and public service delivery while creating new opportunities across sectors, Das said. At the same time, he flagged issues such as data governance, algorithmic bias, AI safety and cybersecurity that will need to be addressed.

Deeper financial markets will also be important as India’s capital requirements increase. Das highlighted the need to strengthen corporate bond markets, pension and insurance funds, municipal finance and other sources of long-term capital.

Strategic self-reliance, particularly in critical sectors such as energy and manufacturing, would help reduce vulnerabilities to external shocks.

The focus on human capital is equally important as India seeks to convert its large working-age population into a sustained source of productivity and income growth.

India’s 7.8 per cent first-quarter growth and the average growth rate above 8 per cent over the latest four quarters show that the economy is already operating close to the level Das highlighted.