India's growth trajectory is likely to remain firm in the near term, even as the pace may soften in the second half of the fiscal year, economist Madan Sabnavis said, projecting that the economy could still average about 7.2% growth for the full year.
Sabnavis' assessment points to a familiar pattern in India's macroeconomic story: strong headline growth supported by domestic demand, but with some moderation as the year progresses and base effects become less favourable. He expects gross domestic product growth in the second quarter to come in at 7.5% to 7.6%, a level that would signal continued momentum in Asia's third-largest economy even if the subsequent quarters cool somewhat.
Near-Term Momentum
Sabnavis' forecast suggests that India is entering the second half from a position of relative strength. A second-quarter reading in the mid-7% range would indicate that activity remains robust across key segments of the economy, even as the global backdrop stays uneven and interest rates remain elevated in many major markets. For policymakers, such a reading would reinforce the view that India continues to outperform most large economies on growth.
The economist's call also implies that the economy has enough underlying demand to absorb a moderate slowdown without slipping into weakness. That matters because India's growth outlook has increasingly become a central policy variable, shaping expectations around fiscal management, inflation control, and the timing of any future monetary easing.
Second-Half Moderation
The more cautious part of Sabnavis' outlook is his expectation that growth could fall below 7% in the second half. That does not amount to a warning sign of recessionary pressure; rather, it reflects the natural deceleration that often follows a strong first half, especially when comparisons become tougher and some sectors face normalisation after earlier bursts of activity.
A second-half slowdown below 7% would still leave India in a strong position by global standards. But it would also remind observers that the economy's current pace may be difficult to sustain quarter after quarter without a broader lift from private investment, manufacturing, and exports. The durability of consumption-led growth, while still important, may not by itself be enough to keep the economy near the upper end of its recent range indefinitely.
Sabnavis' estimate of a 7.2% full-year average therefore sits between optimism and caution. It implies that India can maintain one of the fastest growth rates among major economies, but not without some easing from the pace seen in the first half. The projection also reflects the reality that annual averages can remain strong even when the final quarters are less spectacular than the opening ones.
Long-Term Potential
Beyond the immediate fiscal year, Sabnavis placed India's longer-term growth potential at around 8%, a level that would mark a significant structural achievement if sustained. That estimate is important because it frames the current debate not just around cyclical momentum, but around the economy's capacity to expand over time through productivity gains, investment, and deeper formalisation.
An 8% potential growth rate would place India among the fastest-growing large economies in the world and would strengthen the case for continued reform in infrastructure, manufacturing, logistics, and labour-intensive industries. It would also raise the stakes for fiscal and monetary authorities, who must balance growth support with inflation management and debt sustainability.
For now, Sabnavis' numbers suggest that India remains on a solid growth path, even if the second half is likely to be less buoyant than the first. The broader message is one of resilience: growth may ease, but it is not expected to lose its underlying strength. If the economy does indeed average 7.2% for the year, it would confirm that India continues to expand at a pace that many peers can only aspire to, while still leaving room for a stronger structural trajectory over the medium term.