SEBI, RBI upbeat on India's growth despite global risks

India’s financial markets are expected to sustain growth, supported by resilient domestic demand and robust macroeconomic fundamentals, even as global risks remain elevated. The Reserve Bank of India (RBI) governor Sanjay Malhora termed the country’s macroeconomic fundamentals 'very strong', citing healthy balance sheets of banks and corporates, ongoing reforms, and fiscal consolidation.

The finance ministry’s July Monthly Economic Review highlighted that India’s economic activity continued to expand in the first quarter of FY27, despite heightened global uncertainty. Growth in the January-March period of FY26 reached 7.8%, though industrial activity showed mixed signals, with the Index of Core Industries rising 5.0% year-on-year in June, led by iron ore, electricity, cement, and steel. However, retail inflation has breached the RBI’s target due to rising food prices.

Global headwinds persist, with the International Monetary Fund projecting global growth to slow from 3.2% in 2025 to 3.0% in 2026 before recovering to 3.4% in 2027. Geopolitical tensions in West Asia and volatile commodity prices have added to uncertainty, though domestic demand and policy responses are expected to cushion the impact. Meanwhile, Indian equities faced pressure in 2025-26, with the Nifty 50 and broader indices declining around 14% in US dollar terms.

A parliamentary panel also flagged concerns over the 18% GST on insurance products, noting its adverse effect on affordability and penetration.