The World Bank on Tuesday raised India's GDP growth forecast for FY27 to 7.1 per cent, up from the 6.6 per cent it projected in April.

The upgrade came in the bank's latest India Development Update. It cited a stronger-than-expected first quarter, in which GDP grew 7.8 per cent.

India's economy grew 7.8 per cent in FY26, up from 7.2 per cent in FY25. Strong investment and solid private consumption drove the expansion, the bank said.

Rural consumption initially outpaced urban demand on strong farm output and income support. Urban spending picked up later, helped by income-tax relief and GST cuts.

The forecast is now ahead of the Reserve Bank of India's projection of around 6.7 per cent. The World Bank cautioned that growth may slow in the second half, flagging risks from global oil prices, El Nino and stock market corrections that could disturb capital flows.

The bank expects growth to moderate in later quarters as frontloaded demand fades.