World Bank Revises India's GDP Growth Forecast to 7.2% for 2025-26

World Bank Updates Economic Growth Projections for India

The World Bank has recently revised its economic growth forecast for India in its Global Economic Prospects report. For the fiscal year 2025-26 (April 2025 to March 2026), India's GDP growth is now projected to reach 7.2%, an increase of 0.9 percentage points from the previous estimate of 6.3% made in June 2025.

This upward revision is primarily driven by robust domestic demand, which includes strong private consumption, positive impacts from tax reforms, and improvements in household income in rural areas.

However, for the following fiscal year 2026-27, the growth rate is expected to slow down to 6.5%. This forecast is based on the assumption that a 50% tariff imposed by the United States on Indian exports will remain in effect, potentially affecting export performance. The report notes that despite the tariff, the resilience of India's domestic demand and exports has limited the impact, although it could influence growth in the long term.

Nonetheless, the World Bank believes that despite the anticipated slowdown, India will continue to be the fastest-growing major economy in the world. By 2027-28, growth is expected to rebound to 6.6%, supported by strong performance in services, recovery in exports, and improvements in investment.