India on track for 6.5-7% real GDP growth

New Delhi: India is on track to record real GDP growth of 6.5-7 percent in the current fiscal, with nominal GDP growth expected at around 11-12 percent, while corporate earnings growth could accelerate to 17 percent next fiscal from 14 percent, Jefferies said in its latest report.

The brokerage said India's structural growth story remains intact despite geopolitical challenges and elevated energy risks, with economic indicators showing greater resilience than expected.

According to the brokerage, the improvement in nominal GDP growth is expected to support a pickup in earnings growth from 14 percent in the current fiscal to 17 percent in the fiscal year beginning April 2027.

Jefferies highlighted strong bank credit growth as a key indicator of the economy's momentum. Bank credit expanded 19.1 percent year-on-year at the end of August, while corporate lending grew 21.6 percent in July. Loans to micro, small and medium industrial enterprises rose 24.9 percent, supported by deposit growth of 17.8 percent in August.

The report said the pickup in SME lending could indicate that recent GST and labour reforms, along with efforts to improve the ease of doing business, are beginning to generate benefits. The rise in corporate lending also points to a possible revival of the long-awaited private-sector capital expenditure cycle.

Domestic demand has also remained firm. GST receipts increased 14.8 percent year-on-year in August, while power demand growth accelerated to 9.4 percent during April-August from 1.8 percent in January-March.

Residential real estate sales across the top seven cities rose 7 percent year-on-year in the first seven months of 2026, compared with a 1 percent decline in 2025.

Jefferies noted that India's outlook remains exposed to developments in the Middle East, particularly through energy prices. Brent crude was around USD 106 per barrel at the time of the report, while disruptions around key oil routes were adding pressure to energy markets.

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