An economic slowdown in industrial countries, a weak monsoon, and stalled action on some key structural reforms will see India's growth for the current fiscal year fall short of earlier estimates, but still remain robust, says a new Asian Development Bank (ADB) report.

ADB, in an update of its flagship annual economic publication, Asian Development Outlook 2015, now projects India's gross domestic (GDP) growth for the fiscal year ending March 2016 (FY2015) to come in at 7.4%, below its March estimate of 7.8%. For FY2016 growth is now seen at 7.8% below the earlier forecast of 8.2%.

"In addition to slower than anticipated global growth, the revisions reflect expectations that reforms and improved investor confidence needed to bolster the economy could be months away and could still be set back by potential global market turmoil," said ADB Chief Economist Shang-Jin Wei. "On the upside, inflation is trending down, crude oil import prices have fallen sharply, and tax revenue and net foreign direct investment inflows are up, which augurs well for a bounce back in the economy."

The slowdown in GDP growth in the first quarter was on the back of a slide in growth of consumption, manufacturing and services, with exports contracting significantly due to lower oil prices and lackluster demand.

Encouragingly, fixed investment growth picked up while agriculture witnessed an expansion - despite a weak monsoon which had led to contractions in the previous two quarters. Low global oil prices and tight monetary policy kept consumer price inflation at benign levels in the first 4 months of FY2015.

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