In the June economic outlook, the OECD reduced India growth to 6.3% in FY26 and 6.4% in FY27, compared to earlier projections carried out by 6.4% for FY26 and 6.6% for FY27.
He assumed global growth to slowing to 2.9% in 2025 and 2026 of 3.3% in 2024, cropping his estimates from March. She said that the US economy would grow by only 1.6% in 2025 and in 2026 1.5%, and will announce the tariff announcement of US President Donald Trump.
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While private consumption in India is gradually strengthened, supported by growing actual incomes, mild inflation, tax cuts and improving labor market, investments will be raised by declining interest rates and strong public capital expenditures, OECD report.
“The monetary conditions remain restrictive, despite the reduction of policy in February and April. In April 2025, the heading inflation increased to 3.2% and is now 4% (± 2%) within the target range of the central bank, largely due to substantial food inflation.
“Masuring food prices reflects a strong autumn harvest and government interventions such as export limitation. As the main oil importer, India benefits from lower global oil prices in recent months, reducing home fuel costs and helping to contain input costs in energy -intensive industries such as transport, production and agriculture,” she added.
However, the OECD warned that higher US tariffs could consider exports, while inflation is likely to remain almost 4%, with the risks of a weak monsoon or a rising global commodity price.
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Worldwide growing trade barriers and policy uncertainty harm business and confidence in consumers, leading to OECD to reduce its growth forecast and warn of a wide impact on income and jobs.
“In the last few months, we have seen a significant increase in trade barriers and economic and business policy uncertainty. This sharp increase in uncertainty negatively influenced the business and confidence of consumers and is ready to detain trade and investment,” the report said.
“Weakened economic prospects will be felt around the world, with almost no exception. Lower growth and less trade will hit income and slow employment,” he added.
India, which faces potential HDP losses up to 0.6% due to the escalated tariffs of Trump administration according to the Goldman Sachs analysis, is particularly vulnerable, especially in sectors such as pharmacies, textiles and cars.
In response, India actively negotiates a bilateral trade agreement with the US to complete it soon, to mitigate the impact and strengthen economic ties.
“Increasing tariffs and wider trade voltages can dampen investors, especially in export -oriented -oriented industries such as chemicals, textiles and electronics. However, the total GDP effects will be limited by a slight proportion of exports in GDP, but only 2.1% of GDP is exported to the United States.
“India has a scope to accelerate trade liberalization, simplify customs procedures and decreased tariffs. To improve the efficiency of logistics networks, modernization of digital infrastructure and reduce regulatory uncertainty, especially tax administration, other reforms are required.
“Increasing the availability and availability of long -term finances, including the deepening of capital markets and improving access to loans for small and medium -sized enterprises, would further strengthen the investment climate,” he added.
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Meanwhile, the UBS upgraded the GDP growth prognosis in FY26, India, to 6.4% of 6%, quoting resistant domestic demand and potential business profits, while stronger household consumption was supported by favorable monsoon prospects and political stimuli.
The economic outlook of the Indian Government for FY26 is carefully optimistic, with a prognosis of GDP growth between 6.3% and 6.8%; The Ministry of Finance expects to reach a higher end if global conditions improve, but remain convinced to meet the lower limit despite global challenges.
(Tagstotranslate) Finance Minister (T) Organization for Economic Co-Operation and Development (T) Private Consumancy in India (T) Strong Public Capital Expenditure (T) Modrate Inflation (T) Tax Cuts (T) CONDITIONS REMAIN RESTICTIVE (T) SUBSTANTIAL moderation in Food Inflation (T) Consumer Confidence (T) Impacted Business (T) Strength Economic Binding (T)
