India GDP growth at 8% in Q1 FY27: SBI Research flags resilient economy
Synopsis
SBI Research's Independence Day report puts India's Q1 FY27 GDP growth at 8 per cent — underpinned by a credit surge of 19.3 per cent, up to $85 billion in foreign-currency mobilisation, and a sharp reversal in FII flows. The data suggests India's macro buffers are strengthening even as the RBI has already recouped 55 per cent of FCNR(B) inflows, signalling active balance-sheet management at the central bank.
Key Takeaways
SBI Research projects India's real GDP growth at 8 per cent in Q1 FY27 .
Credit demand grew 19.3 per cent and deposit growth rose 15.4 per cent for the fortnight ended 31 July .
Nearly $52.3 billion mobilised under FCNR(B) as of 13 August ; total foreign-currency mobilisation could reach $80–85 billion .
The RBI recouped approximately $31 billion — about 55 per cent of FCNR(B) proceeds — as of 7 August .
2,257 listed non-BFSI companies posted net sales growth of 24 per cent , EBITDA growth of 9 per cent , and PAT growth of 4 per cent in Q1 FY27 over Q1 FY26.
FII flows reversed from outflows to inflows following policy measures by the RBI and the government.
India's economy is on track to post a real GDP growth of 8 per cent in the first quarter of fiscal year 2027 (Q1 FY27), according to a report by SBI Research released on 15 August 2025, coinciding with the country's 80th Independence Day. The report points to strong credit momentum, surging foreign-currency inflows, and resilient corporate earnings as the pillars underpinning this outlook.
Credit and Deposit Momentum
Credit demand expanded by 19.3 per cent for the fortnight ended 31 July, while deposit growth accelerated to 15.4 per cent over the same period, supported by substantial inflows under the FCNR(B) — Foreign Currency Non-Resident (Banks) — scheme. The twin acceleration signals that domestic financial conditions remain broadly supportive of growth even as global headwinds persist.
FCNR(B) Inflows and Foreign Currency Mobilisation
As of 13 August, nearly $52.3 billion had been mobilised under the FCNR(B) scheme. Despite a one-month truncation of the scheme's window, SBI Research projected total FCNR(B) mobilisation of up to $70 billion by the close of the window. When overseas foreign currency borrowings (OFCBs) and external commercial borrowings (ECBs) are included, total foreign-currency mobilisation could reach $80–85 billion, according to the report.
Notably, the Reserve Bank of India (RBI) had already recouped approximately $31 billion in foreign currency assets as of 7 August — equivalent to nearly 55 per cent of the amount mobilised under the scheme. This rapid recoupment reflects the central bank's active management of external buffers.
Impact on Bond Markets and G-Sec Yields
'The surge in bank deposits and foreign-currency funding should lower the counterfactual level of G-Sec yields through deposit-to-yield transmission gaining credence,' the SBI Research report stated. The clearest beneficiary is expected to be the 3–7-year bond segment due to maturity matching, carry advantages, and lower supply pressure, followed by the 7–10-year segment. This dynamic could offer meaningful relief to borrowers and the government's debt-servicing costs.
FII Flows and Corporate Performance
The report also highlighted a reversal in foreign institutional investor (FII) flows — from earlier outflows to inflows — following policy measures announced by the RBI and the government. This shift in sentiment reinforces the broader narrative of India regaining its status as a preferred emerging-market destination.
On the corporate front, the performance of 2,257 listed non-BFSI companies remained resilient in Q1 FY27, with net sales rising 24 per cent, EBITDA growing 9 per cent, and profit after tax (PAT) increasing 4 per cent — all compared with Q1 FY26. 'India is and will continue to be one of the fastest-growing economies in the world,' SBI Research said.
What to Watch
The sustainability of the 8 per cent growth trajectory will depend on whether FCNR(B) inflows translate into durable domestic liquidity, how quickly FII momentum consolidates, and whether corporate earnings breadth widens beyond the current leaders. The next advance GDP estimate from the government will serve as the formal benchmark against which SBI Research's projection is measured.
Point of View
But the SBI Research report's real signal is in the plumbing: $80–85 billion in foreign-currency mobilisation is a significant macro buffer, yet the RBI has already absorbed 55 per cent of it — suggesting the central bank is using the inflow window to rebuild reserves rather than letting it flow freely into the system. The credit growth figure of 19.3 per cent also warrants scrutiny: rapid credit expansion can flatter near-term GDP while building medium-term stress if asset quality slips. Corporate PAT growth of just 4 per cent against 24 per cent revenue growth points to margin compression that the headline GDP number will not capture. India's growth story remains credible, but the gap between top-line momentum and bottom-line delivery is one to watch.
NationPress
15 Aug 2026
Frequently Asked Questions
What is India's projected GDP growth for Q1 FY27?
SBI Research projects India's real GDP growth at 8 per cent for the first quarter of fiscal year 2027 (Q1 FY27). The forecast is supported by strong credit demand, rising deposits, and large foreign-currency inflows.
How much has been mobilised under the FCNR(B) scheme in 2025?
Nearly $52.3 billion had been mobilised under the FCNR(B) scheme as of 13 August 2025. SBI Research projects total FCNR(B) mobilisation of up to $70 billion by the end of the window, and up to $80–85 billion when OFCBs and ECBs are included.
How has the RBI responded to the surge in foreign-currency inflows?
The RBI had recouped approximately $31 billion in foreign currency assets as of 7 August — equivalent to nearly 55 per cent of the FCNR(B) amount mobilised. This reflects active management of India's external reserves by the central bank.
How did listed Indian companies perform in Q1 FY27?
A sample of 2,257 listed non-BFSI companies posted net sales growth of 24 per cent, EBITDA growth of 9 per cent, and PAT growth of 4 per cent in Q1 FY27 compared with Q1 FY26, indicating broadly resilient but margin-compressed corporate earnings.
What is the outlook for Indian government bond yields?
SBI Research expects the surge in bank deposits and foreign-currency funding to exert downward pressure on G-Sec yields through deposit-to-yield transmission. The 3–7-year bond segment is seen as the clearest beneficiary, followed by the 7–10-year segment.
