Indian economy to grow at 6.5% in current financial year: ADB

Despite a strong 7.8 per cent growth in the first quarter, the Indian economy is expected to grow at 6.5 per cent in the current financial year as the impact of US tariffs on Indian exports will reduce prospects, particularly in the second half, ADB said on Tuesday.

- OUR CORRESPONDENT

It is to be noted that the Asian Development Outlook (ADO) of the Asian Development Bank (ADB), released in April, had projected a higher growth rate of 7 per cent, which was lowered to 6.5 per cent in the July report on concern of a steep 50 per cent US tariffs on shipment from India.

While GDP grew strongly in the first quarter (Q1) of FY26 at 7.8 per cent on improved consumption and government spending, additional US tariffs on Indian exports will reduce growth, particularly in the second half of FY26 and in FY27, though resilient domestic demand and service exports will cushion the impact, ADO September 2025 said.

‘The reduction in exports will impact India’s GDP in both FY26 and FY27 as the tariffs are implemented. As a result, net exports will subtract from growth more than previously forecast in April, it said.