India GDP growth would have exceeded 8% without the external shocks of the past three years, Reserve Bank of India Deputy Governor Poonam Gupta said on October 27, 2026. She said an improvement in the global environment could add between half a percentage point and one percentage point to growth.

Key Takeaways

  • Gupta said India had grown at more than 7% despite an unfavorable external environment.
  • She identified domestic investment and foreign direct investment as important to faster growth.
  • Fuel and external finance remain challenges, while targeted fiscal measures can cushion supply shocks, she said.

What could lift India GDP growth

Speaking at the annual Business Standard BFSI Insight Summit in Mumbai, Gupta said India had built a foundation for faster growth through reforms beginning in 1991, stronger systems, digital infrastructure and greater participation by states.

Her estimate of an additional 0.5 to 1 percentage point was conditional on an improvement in the global environment. She also said accelerating growth would require learning from other countries, increasing domestic investment and securing foreign direct investment.

Fuel, food and supply shocks

Gupta identified fuel and external finance as challenges in the current environment. She was more confident about food supplies, saying the impact of El Niño was being managed and India was becoming a food exporter.

Fiscal policy can cushion the initial impact of supply shocks through targeted supply-side measures, she said, provided those measures remain consistent with fiscal prudence and macroeconomic stability. She added that policy action and adaptation had made the economy less sensitive to some shocks, including deficient rainfall.

Debt and employment outlook

On public finances, Gupta said the relationship between government borrowing costs and nominal GDP growth placed India in a favorable position. She expected the debt-to-GDP ratio to decline under a business-as-usual scenario.

She also dismissed the likelihood that artificial intelligence would have a lasting adverse impact on jobs, citing the experience of previous technological shifts.

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