India’s economic growth outlook is strengthening, with SBI Research estimating July-September 2026 GDP growth at approximately 7.8%, above the Reserve Bank of India’s estimate of 7.2%. Moody’s has separately raised its FY2026-27 growth forecast to 7% from 6.5%, citing resilient domestic demand and improving investment activity.
SBI Research’s Dynamic Factor Model, which tracks 54 high-frequency indicators across agriculture, industry and services, projects gross value added growth of 8% to 8.2% and nominal GDP growth of 11% to 11.5%. Around 88% of leading indicators gained momentum during the quarter. Manufacturing growth is estimated at 8.7%, while services growth is projected at 9.7%. Official GDP data is scheduled for release on November 30.
Moody’s raises forecast as private investment prospects improve
Moody’s expects India’s economy to grow 7% in FY2026-27 and around 7% in 2028. The agency said strong domestic consumption, improving investment activity and the country’s ability to manage energy supply challenges are supporting its outlook.
Improving capital goods production and imports, faster industrial credit growth and higher capacity utilisation point towards a potential new private sector capital expenditure cycle. SBI Research also reported that EBITDA among approximately 2,300 listed non-financial companies increased 35% year-on-year, while net profit rose 33%. Bank credit growth reached 18.2% in the fortnight ended October 15.
However, Moody’s warned that inflation near the upper end of the RBI’s 2% to 6% target range, a potentially weak monsoon and El Niño could weigh on household spending and rural demand.
Promoter ownership rises as foreign investors return
The improvement in the growth outlook comes alongside a shift in Indian equity ownership. Private promoter shareholding in NSE-listed companies rose to a three-year high of 41.93% in the September quarter of 2026, according to PRIME Database Group. Promoter purchases exceeded $4 billion in 2026 as market corrections created more attractive valuations. This followed approximately $56 billion in promoter stake sales during 2024 and 2025.
Domestic mutual fund ownership also reached a record 11.82%, while foreign institutional investor ownership declined to 15.57%, its lowest level in 14 years. However, foreign investor flows have shown signs of recovery. Foreign portfolio investors invested a net $8.2 billion in Indian equities since mid-October, including $5.8 billion during the first six trading sessions of November, according to Jefferies.
The recent buying follows approximately $61 billion in foreign equity outflows between September 2024 and October 2026. Foreign investors remained net sellers in October, with outflows of $2.2 billion, while domestic institutional investors bought $6.3 billion, extending their buying streak to 39 consecutive months. For 2026 so far, foreign investors have sold a record $30.4 billion of Indian equities.
The recent inflows therefore signal a possible improvement in foreign investor sentiment, but the scale of earlier selling and continued sector-level outflows mean a sustained reversal is yet to be established.
What is SBI Research’s estimate for India’s Q2 FY27 GDP growth?
SBI Research estimates growth at approximately 7.8% for July-September 2026, compared with the RBI’s estimate of 7.2%.
What is Moody’s India GDP forecast for FY27?
Moody’s raised its FY2026-27 growth forecast to 7% from 6.5%.
How much has promoter ownership increased?
Private promoter shareholding in NSE-listed companies reached 41.93% in the September 2026 quarter, the highest in three years.
How much have foreign investors invested in Indian equities since mid-October?
Foreign portfolio investors have invested a net $8.2 billion since mid-October, including $5.8 billion in the first six trading sessions of November.
Have foreign investors fully reversed their selling trend?
Not yet. The recent inflows indicate a possible improvement, but foreign investors have sold a record $30.4 billion of Indian equities in 2026 so far.
