The International Monetary Fund (IMF) has raised India’s growth forecast to 6.6% from 6.4% for FY2025/26, as the country’s strong growth momentum is expected to offset the impact of high US tariffs on Indian goods. In its World Economic Outlook report, the IMF said the upward revision was due to a “carryover from a strong first quarter more than offsetting the increase in the US effective tariff rate on imports from India since July.” India’s GDP expanded by 7.8% in April–June, the highest in five quarters, driven by strong private consumption despite a subdued export outlook caused by steep 50% tariffs imposed by US President Donald Trump. However, the IMF lowered India’s growth forecast for FY2026/27 by 0.2 percentage points to 6.2%. The IMF’s upgrade comes a week after the World Bank raised its own forecast for India’s growth in FY2025/26 to 6.5% from 6.3%, while trimming its projection for the next fiscal year by 20 bps to 6.3% due to the impact of US tariffs.
