The Asian Development Bank (ADB) has upgraded India's gross domestic product (GDP) growth forecast for FY27 to 7.3%, an increase of 80 basis points from its previous estimate of 6.5% in December 2025. This revision is attributed to several factors, including government reforms, a significant trade agreement with the European Union, and expected salary hikes for government employees, which are anticipated to enhance household spending. The ADB's April 2026 Asian Development Outlook highlights that India is likely to remain one of the fastest-growing major economies, bolstered by strong private consumption, public infrastructure investment, and improved corporate financial health. However, the report warns of potential risks stemming from geopolitical tensions, particularly the ongoing conflict in Iran, which could lead to higher energy prices and weaker external demand. Despite these challenges, the ADB expects domestic demand to strengthen, aided by regulatory reforms and an uptick in investments. The growth forecast for FY26 has been slightly downgraded to 6.9% due to global economic headwinds. Inflation is projected to rise to 4.5% in FY26 before easing to 4.0% in FY27, influenced by higher crude and gas prices. The current account deficit is expected to widen in FY26 but narrow in FY27 as oil prices stabilize and export gains materialize.