Mumbai, Apr 8 (PTI) The Reserve Bank on Wednesday projected India's GDP growth for the current financial year at 6.9 per cent, lower than 7.6 per cent estimated for 2025-26, driven by concerns over elevated commodity prices and supply chain disruptions originating from the West Asia crisis.

Unveiling the first bi-monthly monetary policy for 2026-27, RBI Governor Sanjay Malhotra said the merchandise exports may be adversely impacted by disruptions in key shipping routes and the concomitant rise in freight and insurance costs.

On the other hand, sustained momentum in the services sector, persisting impact of GST rationalisation, rising capacity utilisation in manufacturing, and healthy balance sheets of financial institutions and corporates should continue to support domestic demand, he said.

India's real gross domestic product (GDP) is estimated to grow by 7.6 per cent (year-on-year) during 2025-26, as per the Second Advance Estimates (SAE) of the new GDP series (base year 2022-23).

The Governor said elevated energy and other commodity prices, coupled with supply shock due to disruptions in the Strait of Hormuz, would act as a drag on domestic production in 2026-27.

"Heightened volatility in global financial markets with its spillover on domestic financial conditions would weigh on growth prospects," Malhotra said.

He further said the government's focus on scaling up domestic manufacturing in several strategic and frontier sectors announced in the Union Budget 2026-27 bodes well for India's ensuing growth trajectory.

"Taking all these factors into consideration, real GDP growth for 2026-27 is projected at 6.9 per cent, with Q1 at 6.8 per cent; Q2 at 6.7 per cent; Q3 at 7.0 per cent; and Q4 at 7.2 per cent," Malhotra said.

He said the outbreak of the conflict in West Asia has led to severe disruption of global supply chains and poses an unprecedented challenge for the global economy – higher prices and lower global growth. PTI NKD CS DRR

GDP growth projection moderates as supply chain disruption, commodity prices and global volatility weigh on domestic outlook. India's real GDP growth for 2026-27 is projected at 6.9 per cent, with quarterly estimates of 6.8 per cent in Q1, 6.7 per cent in Q2, 7.0 per cent in Q3 and 7.2 per cent in Q4. The projection reflects elevated commodity and energy prices, supply chain disruptions, and higher freight and insurance costs, while domestic demand is supported by services activity, GST rationalisation, manufacturing capacity utilisation, and healthy financial sector and corporate balance sheets.