India continues to shine as the fastest-growing major economy, shrugging off a global slowdown, according to the International Monetary Fund (IMF). In its latest World Economic Outlook update from late 2025, the IMF projects India’s GDP growth at 6.6% for fiscal year 2025-26. This marks an upward revision of 0.2 percentage points, driven by strong domestic demand and robust first-quarter performance of 7.8%.
The forecast outpaces global growth of 3.1% in 2026, with China at 4.8%, the US at 2.0%, and other majors lagging behind. India’s resilience stems from solid private consumption, infrastructure reforms, and financial inclusion drives, offsetting US tariff hikes under President Trump. Despite trade tensions, India’s external stability and policy reforms keep it ahead. The IMF notes India’s economy, now the fifth-largest globally, could become the third-largest by 2030 if trends hold.
Finance Minister Nirmala Sitharaman hailed the outlook, crediting structural reforms like digital payments and manufacturing boosts. Exports may face headwinds from 50% US tariffs on some goods, but domestic momentum—fueled by a young workforce and rising middle class—powers ahead. IMF chief economist Pierre-Olivier Gourinchas praised India’s “exceptional outperformance.”
This positions India as a global growth engine amid uncertainties like protectionism and labor shocks elsewhere. With fiscal buffers rebuilding and central bank independence intact, experts see sustained momentum into 2027.
FAQs [Frequently Asked Questions]
1. What is India’s projected GDP growth for 2025-26 per IMF?
The IMF forecasts 6.6% growth for fiscal year 2025-26, up from prior estimates, due to strong Q1 data and domestic demand outpacing global peers.
2. How does India’s growth compare to China and the US?
India leads at 6.6%, ahead of China’s 4.8% and US’s 2.0%, retaining its spot as fastest-growing major economy despite tariffs.
3. What factors are driving India’s economic resilience?
Robust private consumption, infrastructure reforms, and financial inclusion offset US tariffs; a young workforce supports long-term gains.
4. What risks could impact India’s growth outlook?
Prolonged trade tensions, protectionism, and global labor shocks pose challenges, but strong fundamentals aid navigation.