India is expected to maintain real GDP growth of between 6.5 and 7 percent during the current fiscal year, according to global brokerage Jefferies. The latest assessment points to resilient domestic demand, accelerating bank credit and improving economic activity as key factors supporting India's growth outlook.
In its latest GREED and fear report, Jefferies said India's economic performance has been stronger than it had anticipated six months earlier. The brokerage said developments in bank lending and domestic demand have contributed to the improved assessment of economic momentum.
Jefferies expects real GDP growth to remain in the 6.5 to 7 percent range during the current fiscal year. It also expects nominal GDP growth to be around 11 to 12 percent. Real GDP growth measures the increase in economic output after adjusting for price changes, while nominal GDP growth reflects output at current prices.
One of the main factors highlighted by Jefferies is the expansion in bank credit. According to the report, bank credit growth increased to 17.8 percent year on year in July. The brokerage said stronger lending activity indicates that demand for financing has remained firm across parts of the economy.
Credit to micro, small and medium enterprises has also shown particularly strong growth. Jefferies said lending to MSMEs increased by 24.9 percent. MSMEs are an important component of India's economic activity, with businesses in the segment operating across manufacturing, services, trade and other sectors.
The increase in credit availability can influence economic activity by supporting business expansion, working capital requirements, investment and consumption. However, credit growth is only one indicator of economic momentum, and the broader growth outlook also depends on factors such as household demand, investment, exports, government spending and global economic conditions.
Jefferies said domestic demand remains resilient. Domestic consumption is an important component of India's economy, and sustained demand can support production and services activity even when external conditions remain uncertain.
The brokerage's assessment also points to stronger corporate lending. Improving lending to companies can provide financing for business activity and investment, although the impact on overall GDP growth depends on how credit is ultimately deployed and whether it translates into higher production and investment.
The latest forecast comes amid continued attention on India's growth trajectory. Economic forecasts from different institutions can vary because they use different assumptions about inflation, investment, consumption, global trade, interest rates and other economic factors. Jefferies' 6.5 to 7 percent estimate therefore represents its own assessment rather than an official government GDP forecast.
The distinction is important because official GDP figures are released by India's statistical authorities, while financial institutions and research firms provide independent forecasts. Such forecasts can change as new economic data becomes available.
Jefferies has also recently assessed the direction of domestic credit growth. In a September report, the brokerage said domestic credit growth could moderate to around 15 percent by March 2027 from approximately 18 percent currently, partly because of a higher base from December 2026. It nevertheless said credit demand had remained strong and that banks were gaining market share from bonds and external commercial borrowings.
This means that while the current pace of credit growth is supporting the near-term economic outlook, Jefferies expects the rate of expansion to moderate later. A moderation in credit growth would not necessarily mean that credit availability is contracting. Rather, it would indicate a slower year-on-year rate of increase from a higher existing base.
The brokerage's latest GDP assessment also includes a forecast for nominal GDP growth of 11 to 12 percent. Nominal GDP incorporates both changes in economic output and changes in prices, making it different from the real GDP measure used to assess underlying output growth.
The combination of real GDP growth of 6.5 to 7 percent and nominal GDP growth of 11 to 12 percent implies that price effects are expected to account for part of the difference between the two measures. Actual GDP outcomes will depend on how inflation and real economic activity evolve through the fiscal year.
Domestic demand remains an important factor in the broader outlook. India's relatively large domestic market means that household consumption and domestic investment can have a significant influence on overall economic activity. Jefferies' assessment indicates that these domestic factors are currently providing support to growth.
Credit conditions are another important consideration. When banks expand lending, businesses and households can obtain financing for a range of economic activities. However, stronger credit growth does not automatically translate into an equivalent increase in GDP because the quality and destination of lending also matter.
The MSME lending figures highlighted by Jefferies are notable because smaller businesses account for a substantial share of commercial activity across India. Higher credit availability for these enterprises can support inventory purchases, expansion, employment and working capital requirements, although the ultimate economic impact varies by sector and business conditions.
The outlook also needs to be considered against global economic developments. India's growth performance can be affected by international trade, commodity prices, foreign demand, geopolitical developments and changes in global financial conditions. These factors can influence exports, investment flows and business confidence.
Jefferies' latest report therefore presents the 6.5 to 7 percent growth estimate as part of a broader assessment of India's domestic economic momentum. The brokerage cited stronger-than-expected economic performance over the previous six months, alongside faster credit growth and continued domestic demand.
Other institutions have published different growth projections at different points in time. For example, S&P Global Ratings previously projected 6.5 percent growth for one fiscal year and 6.7 percent for the following year, while the Reserve Bank of India has also issued its own growth projections. These estimates are not directly interchangeable because they were made at different times and under different assumptions.
For businesses and investors, the Jefferies assessment provides one indication of how financial analysts currently view India's growth prospects. Strong credit growth and domestic demand can support corporate revenues and investment activity, but the actual economic outcome will ultimately be determined by a wider range of factors.
The 6.5 to 7 percent forecast also places continued attention on the sustainability of India's domestic growth drivers. If consumption, investment and credit activity remain resilient, economic expansion could stay within the range projected by Jefferies. Conversely, changes in global conditions, domestic demand or financial conditions could lead to revisions.
For now, Jefferies expects India to record real GDP growth of 6.5 to 7 percent during the current fiscal year, alongside nominal GDP growth of approximately 11 to 12 percent. The brokerage has pointed to resilient domestic demand, stronger bank credit and improving economic activity as the principal factors supporting its assessment.