The International Monetary Fund (IMF) has raised India’s GDP growth forecast for 2025-26 to 6.6% from the previous estimate of 6.4%, despite the impact of increased US tariffs on Indian exports. This upward revision reflects strong growth momentum from the first quarter, which more than compensates for the tariff hike, according to the IMF’s World Economic Outlook.
India’s economy grew at a robust 7.8% in Q1 of 2025-26, driven by strong private consumption. The government’s recent GST reforms, lowering tax rates on consumer goods and services, are expected to further boost domestic demand and offset reduced external demand caused by US tariffs. The IMF’s forecast aligns closely with the World Bank’s recent upgrade of India’s FY26 growth estimate to 6.5%.
Globally, the IMF expects growth in emerging markets and developing economies to slow slightly from 4.3% in 2024 to 4% by 2026. The report highlights challenges such as higher US tariffs and trade uncertainties affecting investment in export-driven economies.
IMF Managing Director Kristalina Georgieva praised India as a key global growth driver but warned that global economic resilience remains untested amid ongoing uncertainties.
