Tariffs No Dampener? IMF Ups India's FY26 GDP Growth Forecast To 6.6%
The upward revision for FY26 is attributed to a carryover from a strong first quarter, more than offsetting the increase in the effective US tariff rate on imports from India since August.
India's GDP is projected to grow by 6.6% in fiscal year 2026 and 6.2% in fiscal 2027, according to the latest estimates released by the International Monetary Fund on Tuesday.
The IMF forecast for FY26, released as part of the agency's 'World Economic Outlook', marks a 0.2-percentage-point upward revision as compared to its previous projection released in July.
The FY27 growth forecast for India, however, marks a 0.2-percentage-point downwards revision as compared to the earlier projection.
The upward revision for FY26 is attributed to a carryover from a strong first quarter, more than offsetting the increase in the effective US tariff rate on imports from India since August.
The country's imports are subjected to tariffs as high as 50%, which is at par with Brazil and highest among all major US trading partners.
Compared with the IMF's pre-tariff forecast in October 2024, India's growth is projected to be cumulatively 0.2 percentage point lower.
Global output is projected to grow by 2.6% in 2025. As the new landscape takes shape, the world is adapting, the release said. The tariff shock in April and the associated uncertainty with which it unfolded prompted a downward revision of the global growth projection for 2025, by 0.5 percentage point to 2.8%, in the April 2025 WEO.
