World Bank sees India growing 7.1% in FY27, calls AI a big development opportunity
Strong domestic demand and exports keep India among the fastest-growing major economies, the World Bank says in its October update.
India's economy is expected to expand by 7.1% in the financial year 2026-27, according to the World Bank's latest India Development Update released in October. The lender credited robust household demand and healthy export growth for the upbeat projection.
The bank described India as one of the fastest-growing large economies and a key engine of global growth. For South Asia as a whole, it projects 6.9% growth in 2026, the strongest of any region in the world.
AI takes centre stage
This edition focuses on artificial intelligence. The report notes that private AI investment in India roughly tripled, from about $1.2 billion in 2024 to $4.1 billion in 2025. Employment in Global Capability Centres also climbed, from around 1.9 million people in 2024 to about 2.36 million in 2025.
The World Bank says India is well placed to benefit because of its large technical workforce, a globally connected IT industry and its digital public infrastructure. It recommends expanding AI-enabling infrastructure, widening access so benefits reach smaller firms and workers, and investing in skills.
Risks remain
The outlook is not risk-free. The report flags volatile global oil prices, a possible El Niรฑo and sharp stock market corrections that could trigger swings in capital flows.
Source: World Bank
