India is expected to remain the world's fastest-growing major economy, says World Bank; Raises GDP forecast for FY26 to 6.5%

India is expected to remain the worlds fastest-growing major economy, underpinned by strong consumption growth, improved agricultural output and rural wage growth, the World Bank on Tuesday said. Moreover, the governments reforms to the Goods and Services Tax (GST)reducing the number of tax brackets and simplifying complianceare expected to support activity. The forecast for FY26/27 has been downgraded, however, as a result of the imposition of a 50 percent tariff on about three-quarters of Indias goods exports to the United States, the Bank noted. India had been expected to face lower U.S. tariffs than its competitors in April but as of the end of August it faces considerably higher tariffs. Almost one-fifth of Indias goods exports went to the United States in 2024, equivalent to about 2 percent of GDP. The World Bank raised Indias gross domestic product (GDP) forecast for 202526 (FY26) to 6.5 per cent from 6.3 per cent projected in June and revised downwards the estimate for 202627 (FY27) by 20 basis points to 6.3 per cent due to higher-than-expected tariffs on Indias exports to the United States.

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