IMF raises India growth outlook despite global risks

Indias economy is expected to grow faster than earlier projected despite concerns over a Middle East crisis, the International Monetary Fund (IMF) said on April 14, raising its forecast to 6.5% from 6.4% estimated in January.

For 2026, growth has been revised up by 0.3 percentage points (0.1 percentage point higher than the January estimate) to 6.5%. The IMF said this is supported by strong momentum from 2025 and a reduction in additional U.S. tariffs on Indian goods from 50% to 10%, which offsets the negative impact of the Middle East conflict. Growth is expected to remain at 6.5% in 2027.

 

The Indian government, however, has projected a higher growth rate of 7.6% for FY26, about one percentage point above the IMFs earlier estimate.

On inflation, prices are expected to rise sharply. Inflation is projected to increase to 4.7% in FY27 from 2.1% in FY26, before easing back to the Reserve Bank of Indias target of 4% in FY28.

The IMF noted that inflation in China is likely to rise from low levels, while in India it is expected to return close to target after a decline in 2025 driven by lower food prices.

Globally, economic growth is expected to slow to 3.1%, down from the earlier projection of 3.3%. The global economy had grown by 3.4% in 2025.