The International Monetary Fund (IMF) has increased India growth forecast by 0.2 percentage point to 6.6% for the fiscal year 2025-26, as strong momentum in the country can see how it equals the impact of high American tariffs on Indian goods.
Indian GDP increased in April-red at an unexpectedly higher rate of 7.8% due to strong private consumption, which helped him to remain the fastest growing main economy despite the cloudy export overlook for 50% of the tariffs deposited by US President Donald Trump.
In its world economic outlook, the IMF said that the ascending revision of the Indian year of 2025-26 was “transmission from the strong first quarter more than compensating an increase in the effective rate of US tariffs from imports from India”.
The Indian financial year takes place from April to March.
In the next fiscal year, however, the IMF reduced India growth forecast by 0.2 percentage point to 6.2%, reported in Washington.
The IMF upgrade comes a week after the World Bank increased its growth forecast in India to 2025/26 to 6.5% of 6.3%, while its projection for the next fiscal year trimmed by 20 basis points to 6.3% due to US tariffs.
The IMF assumed the growth of developing markets and developing economies to a slight of 4.3% in 2024 to 4.2% in 2025 and 4% in 2026.
“In addition to China, the developing market and developing economies, they showed strength, sometimes for specific domestic reasons, but recent signals also point to a fragile view,” he said.
Higher American tariffs reduce external demand and the growing uncertainty of business policy weighs investment in large economies led by exports, the report said.
(Reporting Nikunj Ohi and Manoj Kumar; Editing Kim Coghill)
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