India’s economy is projected to grow at a steady 6.5 percent in 2027, maintaining its position as the fastest-growing major economy, the International Monetary Fund said on Tuesday, even as escalating tensions in West Asia weigh on the global outlook.
The multilateral lender noted that India’s growth forecast for 2026 has been revised upward by 0.3 percentage point to 6.5 percent. The revision is driven by the carryover effect of a strong performance in 2025 and a reduction in additional US tariffs on Indian goods from 50 percent to 10 percent.
“For 2026, growth is revised upward moderately by 0.3 percentage point (0.1 percentage point relative to January) to 6.5 percent, led by positive contributions from the carryover of the strong 2025 outturn and the decline in additional US tariffs on Indian goods from 50 to 10 percent, which outweigh the adverse impact of the Middle East conflict,” the IMF said in its latest World Economic Outlook released in Washington.
“Growth is projected to stay at 6.5 percent in 2027,” it added.
Despite India’s resilient outlook, the IMF flagged a moderation in global growth under the assumption that the ongoing conflict remains relatively short-lived. Global growth is projected at 3.1 percent in 2026 and 3.2 percent in 2027, down from an estimated 3.4 per cent in 2025.
At market exchange rates, world output is expected to expand by 2.6 percent in both 2026 and 2027.
The IMF said the relatively modest downward revision to global growth compared to its January 2026 update reflects a balance between persistent tailwinds and the negative effects of geopolitical tensions. Factors such as lower tariffs, existing policy support, and stronger-than-expected economic performance toward the end of 2025 and early 2026 have helped cushion the impact of the crisis.
(With inputs from PTI)