India’s economy continues to show signs of resilience despite persistent global uncertainties, with strong credit demand, substantial foreign capital inflows, robust foreign exchange reserves, improving monsoon conditions and encouraging corporate performance emerging as key strengths, according to SBI Research.
The economic research wing of the State Bank of India highlighted several positive indicators in a note around the country’s 80th Independence Day. In particular, the bank cited estimates of 8% real GDP growth in the first quarter of FY27, credit growth of more than 19%, deposit growth of over 15% and improved rainfall as among the key achievements.
SBI Research said the overall macroeconomic environment remains resilient even as uncertainty in the global economy remains high.
Credit demand remains strong
One of the most important indicators highlighted by SBI Research is the rapid growth in bank credit.
The research note also indicates that bank credit expanded 19.3% year-on-year in the fortnight ending 31 July 2026. Deposit growth was also good at around 15.4%.
Strong credit expansion is generally viewed as an indicator of economic activity because businesses and consumers tend to borrow more when investment, consumption and expansion prospects are positive.
SBI Research said that the continuation of the demand for credit is indicative of the strength of the domestic economy.
The research agency also cited significant foreign currency inflows through the FCNR(B) route. About $52.3 billion had been mobilised under the scheme by August 13.
SBI Research expects total FCNR(B) mobilisation to reach around $65 billion to $70 billion by the end of the scheme. If the mobilisation from overseas foreign currency bonds and external commercial borrowings is accounted for, total mobilisation will reach $80 billion to $85 billion, according to the analysis.
GDP growth outlook is good
SBI Research’s Nowcasting model estimates that the real GDP growth will be around 8% in Q1 FY27.
The strong growth projection indicates that domestic economic activity is still relatively strong even in a world of global headwinds.
Consumer demand, investment activity, banking-sector credit and corporate performance are among the factors that support the overall economic outlook.
The research agency said the growth outlook is strong but that international uncertainties still pose risks.
The foreign investment flows show signs of reversal
Another positive development flagged by SBI Research is the improvement in foreign investment flows into Indian financial markets.
After a period of foreign institutional selling, the research agency observed signs of a reversal towards inflows following measures announced by the Reserve Bank of India and the government.
The return of foreign capital may provide further support to Indian financial markets and the rupee, as well as boost Indian financial markets in general, and will also make the overall liquidity conditions in India better for the country.
Corporate performance has also been driving domestic demand. SBI Research reported that among 2,257 listed non-BFSI companies in the first quarter of FY27, net sales increased by 24% year-on-year, EBITDA grew 9%, and profit after tax rose 4%.
The figures suggest that corporate activity is still fairly strong across large parts of the non-financial sector.
Forex reserves reach $700 billion
India’s foreign exchange reserves have also emerged as a major economic strength.
SBI Research said reserves reached roughly $707 billion at the end of the first week of August, the highest level in four months. The reserves grew by as much as $14.1 billion in a week, the strongest weekly increase since January 2026.
The increase provides India with a large external buffer against global financial volatility.
The RBI has also introduced measures to promote foreign currency inflows. These are incentives and facilities related to overseas borrowings, foreign investment in government securities and currency hedging.
Higher reserves can better help India to cope with external shocks, strengthen financial stability and deal with abrupt shifts in international capital flows.
Monsoon conditions show improvement
The monsoon is still a major factor for the Indian economy: rainfall has a direct effect on agriculture, rural incomes, food prices and consumption.
In previous years, fears over rainfall conditions had raised concerns about agricultural output and food inflation. But SBI Research, however, said that rainfall conditions have gradually improved.
The nationwide precipitation deficit has fallen to about 13%. At the same time, kharif sowing is only about 2% less than during the same period last year.
This would suggest improvement in irrigation coverage and some support for agricultural activity, the research agency said.
Rural economy could be encouraged
A stronger monsoon could have significant implications for India’s economy as a whole. Better rainfall generally boosts the productivity of farming, incomes of rural people and the demand for consumer goods, cars, agricultural equipment, and other products.
Rural consumption is a crucial part of India’s overall growth story. If agricultural conditions improve during the current season, the rural economy could provide further impetus to domestic consumption.
SBI Research sees the increase in rainfall as a positive development and also in contrast to earlier concerns about weather conditions and food inflation.
Several factors support the economy.
Economic factors support the economy
Taken together, SBI Research's assessment of India’s economic resilience highlights several factors: strong credit growth, rising deposits, significant foreign currency mobilisation, improving foreign investment flows, strong corporate results, high forex reserves and a gradual recovery in monsoon conditions.
All of these factors could help sustain domestic economic growth momentum even as the global situation appears uncertain.
But the external risks, commodity prices, global interest rates, geopolitical tensions and future monsoon performance will continue to influence India's economic trajectory.
The indicators of SBI Research show that the domestic economy remains on an even footing. GDP growth is expected to be around 8% in the first quarter of FY27, and several financial indicators are also strong in the first quarter, so India enters the next phase of the financial year with a relatively resilient economic base.
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