New Delhi: The International Monetary Fund (IMF) has revised India’s GDP growth forecast upward to 6.6% for the financial year 2025-26, from its earlier projection of 6.4%, even as the country faces higher US tariffs on exports.
In its latest World Economic Outlook, the IMF said the improvement stems from the strong momentum seen in the first quarter of the fiscal year, which more than offsets the impact of the increased US effective tariff rate on Indian imports since July.
India’s economy expanded at a rapid 7.8% in the April–June quarter of 2025-26, its fastest growth in over a year, driven by robust private consumption. With the government implementing sweeping Goods and Services Tax (GST) reforms and lowering tax rates on several goods and services, domestic demand is expected to strengthen further. The IMF noted that this resilience in internal consumption will help cushion the economy against weaker external demand caused by the tariff hike.
The Fund’s upgraded projection follows a similar move by the World Bank, which recently raised India’s growth estimate for FY26 to 6.5% from 6.3%, citing strong fundamentals and continued policy reforms.
According to the IMF, growth in emerging markets and developing economies is expected to moderate slightly, falling from 4.3% in 2024 to 4.2% in 2025 and 4% in 2026. The report warned that trade tensions and policy uncertainty are weighing on investment in export-dependent economies, especially amid rising global protectionism.
IMF Managing Director Kristalina Georgieva praised India’s expanding role in the global economy, describing it as a “key growth engine” at a time when China’s growth continues to slow. She said that despite the recent tariff disruptions, the global economy has shown greater resilience than expected, supported by decisive policy actions and private sector adaptability.
However, Georgieva cautioned that global stability remains fragile. “It’s too early to relax. Global resilience has not yet been fully tested, and the next challenge may be closer than we think,” she warned.
