From the International Monetary Fund (IMF) raising India’s FY26 GDP growth projection to 7.3%, to weak core sector output compared to pre-Covid levels, India’s new deal with the United Arab Emirates (UAE), rising US-EU tensions over Greenland and pressure on small-money UPI loans amid rising household debt, here’s the week’s news.
Forecasts of higher GDP growth
The IMF scrapped its projection for India GDP growth in FY26 to 7.3% from the October estimate of 6.6%. It attributed the upward revision to better-than-expected performance in the September quarter and strong growth in the ongoing quarter.
The Reserve Bank of India and the World Bank have similarly revised their forecasts in their latest iterations. However, the IMF, the World Bank and other major institutions expect a slowdown in GDP growth next year. The IMF projects growth of 6.4% in both FY27 and FY28, while the World Bank expects it to slow to 6.5% in FY27, partly due to US tariffs on Indian imports and easing of cyclical factors.
Core sectors muted
India’s eight major industries are growing at a subdued pace this fiscal. In the first nine months of FY26, output rose 2.6%. In the last decade, only FY16, FY20 and FY21 saw slower growth. The figures for December were released earlier this week.
The slowdown in FY26 is broad-based: all sectors except cement and steel were weak. The sharpest decline was recorded by natural gas (3.2%), oil and coal decreased by 1.8% and 0.7%, respectively. Other components of the index are refined products, fertilizers and electricity.
That said, December was a bit better. Output rose 3.7% year-on-year, marking the second consecutive month of expansion.
India-UAE Energy Friendship
India on Monday signed an agreement to buy liquefied natural gas (LNG) from the United Arab Emirates (UAE) for $3 billion. Under the agreement, state-owned Abu Dhabi National Oil Co will supply this value of LNG to Hindustan Petroleum Corp. Ltd for a period of 10 years starting from 2028.
The UAE’s share of India’s LNG imports has grown sharply over the years from 1.5% in FY18 to 12.8% this year. The deal will make India the largest buyer of LNG in the UAE, accounting for around 20% of its sales by 2029. The West Asian country is currently India’s third largest external source of LNG.
Numbers in the news
₹75,000 million: The cost of national highway projects, which after a long hiatus since 2014, the government plans to offer under a build-operate-transfer (BOT) toll model involving private road developers, The Mint reported.
5.63: China’s birth rate per 1,000 population in 2025, according to population statistics released Monday. It is the lowest since 1949 as the world’s second most populous country struggles with a shrinking population.
8.3%: The the third quarter profit decline of the sixth largest IT company in the country LTIMindtreemainly due to fees of approx ₹590 million in connection with new labor regulations, Reuters reported.
$25 billion: AM Green Group investment plans to set up a one gigawatt data center in Uttar Pradesh after signed agreement with InvestUP, the government’s investment-focused arm, at the 2026 World Economic Forum in Davos.
3000: Estimated death in Iran’s recent crackdown on nationwide protests — the first official statistics released by the government, though lower than the numbers provided by human rights groups.
Trump’s arctic brawl
US President Donald Trump this week threatened eight European allies with a 10 percent tariff when they tried to resist his idea to take over Greenland. After meetings at the World Economic Forum in Davos, he backed away from that threat for now – but not before unnerving stock markets around the world. The Sensex has fallen nearly 2.5% in the past week.
Europe is in a difficult situation. The two sides of the Atlantic have long been friends, but the US is now more dominant than ever in the global economy, giving it the upper hand: in terms of sheer size, it has slipped past the EU unstoppably since 2010. The US is also a key export market for the newly targeted countries, giving them an added advantage.
Microloans on UPI
The Retail Payments Authority of India is in talks with lenders to get credit lines as low as possible ₹5,000 on Unified Payments Interface (UPI), banking on credit card-like interest-free periods and regulatory clarity to increase uptake, The Mint reported.
This comes at a time when Indians are increasingly indebted. The number of living unique borrowers — individuals with at least one active loan — has more than doubled to over 280 million in the past seven years, RBI data shows.
Household financial liabilities have increased as a share of GDP from 3% in FY15 to nearly 5% in FY25. A small ticket, instant credit embedded in UPI could further reduce the psychological barrier to borrowing and potentially normalize debt for everyday consumption rather than asset creation.
