The World Bank has revised India’s GDP growth estimate for FY26 to 7.2%, up 90 basis points from its earlier projection of 6.3%, citing robust domestic demand driven by strong private consumption. This, it said, has been supported by earlier tax reforms and rising real household earnings in rural areas. According to the first advance estimate of the government, India’s GDP would grow at 7.4% in FY26.
In its Global Economic Prospects report, the multilateral agency also noted that despite a 50% tariff imposed by the US, India’s services exports remained resilient and merchandise exports rose in November. “This partly reflects buoyant demand from the United States and other trading partners, supported by efforts to diversify export markets to increase resilience,” the World Bank said.
However, growth is projected to moderate to 6.5% in FY27, assuming the US import tariffs remain in place throughout the forecast horizon. Even so, India is expected to remain the fastest-growing major economy. “Despite higher tariffs on certain exports to the United States—which accounts for about 12% of India’s merchandise exports—the growth forecast has remained unchanged from the June projections, primarily because the adverse impact of higher tariffs is expected to be offset by stronger domestic demand and more resilient exports than previously anticipated,” it said.
For FY28, India’s growth is projected at 6.6%, underpinned by robust services activity, a recovery in exports, and a pickup in investment.
Meanwhile, the World Bank has raised its global growth forecast for 2025 to 2.7%, 40 basis points higher than its earlier estimate. The US economy is projected to grow at 2.1% in 2025 and 2.2% in 2026, while China is expected to expand by 4.9% in 2025, slowing to 4.4% in 2026.