World Bank ups India's FY26 growth projection to 6.5%

THE WORLD BANK has raised India’s growth projection by 20 basis points (bps) to 6.5% for the current financial year due to better-than-expected performance in the first quarter but trimmed the projection for next year by 20 bps to 6.3%, citing the impact of a steep 50% US tariff on Indian goods.

- FE BUREAU

In its South Asia Development Update, the fund bank said growth in South Asia is on track to exceed earlier expectations and reach 6.6% in 2025, but is expected to slow to 5.8% in 2026, in part as a result of higher-than-expected tariffs on India’s exports to the US.

India is expected to remain the world’s fastest-growing major economy, underpinned by continued strength in consumption growth, it said. Domestic conditions, particularly agricultural output and rural wage growth, have been better than expected.