India to remain fastest growing even as FY26 GDP forecast cut to 6.2-6.7%

Despite global economic uncertainties, India is projected to grow 6.2-6.7% in the current FY25 range. Amid the ongoing tariff war and volatility in US trade policy, international agencies have revised India's growth projections downwards by up to 0.5%. The International Monetary Fund (IMF) and the World Bank have cut India's growth forecasts for FY26 to 6.2% and 6.3%, respectively, from earlier projections of 6.5% and 6.7%. The Reserve Bank of India maintains its projection of 6.5% growth for the FY25. Other organisations such as the Organisation for Economic Co-operation and Development (OECD) and Fitch Ratings have revised their projections to 6.4%, while S&P estimates 6.5% growth. Moody's Analytics has projected a more conservative estimate of 6.1% for the CY25. 

The Indian economy is estimated to have grown 6.5% in FY24. Despite the potential for the US economy to slip into recession and China's growth being significantly impacted, India is expected to remain the fastest-growing major economy. The Asia Development Bank has revised its projection for India's growth to 6.7% in FY25, down from 7%. However, domestic constraints, particularly weak consumer sentiment, may limit the government's ability to offset the impact of tariffs, potentially causing growth to slip to 4% or less this year. 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.