A shining star among emerging markets, Asia's third-largest economy is losing momentum but economists remain nonplussed, flagging catalysts that could see growth top 8 percent in coming years.
India's gross domestic product (GDP) grew 7 percent on-year in the April-June quarter, versus a 7.5 percent gain in the first three months of the year, dragged down by weak net exports.
"While the headline GDP has disappointed, the internals, as reflected by improving consumption and investment demand, support our view that a gradual revival is under way," Anurag Jha, Citi economist, said in a note.
Both Citi and Morgan Stanley are forecasting 7.5 percent annual growth in fiscal 2016 and 8.1 percent the following year, compared to 7.3 percent in 2014-2015.
Emerging markets guru Mark Mobius also sounded a bright note: "GDP will go higher in coming months; India will probably achieve what China did 5-8 years ago," the Franklin Templeton Investments chairman told CNBC.
But that's not to say risks are minimal.
A 7 percent growth rate makes India one of the world's fastest-growing countries, on par with China, and similar to Beijing, economic data must be taken with a pinch of salt. Earlier this year, New Delhi announced a landmark change in its calculation of GDP by basing economic activity on market prices instead of production costs.
"The bottom line is we can't read too much into the new GDP growth data - up or down - as the new methodology hasn't yet gained credibility," ANZ economists said in a report.