India's GDP to grow at 6.5% in FY27, says IMF
What's the story
The International Monetary Fund (IMF) has revised India's GDP growth forecast for the current fiscal year to 6.5%. This is an increase from the earlier estimate of 6.4% made in January and 6.2% in October last year. The revision comes on the back of a strong performance in 2025 and a reduction in US tariffs on Indian goods from 50% to just 10%.
Future projections
India's GDP growth forecast for FY28
The IMF also projects India's growth will remain steady at 6.5% in FY28, according to its latest World Economic Outlook report. This stability in the forecast is a positive sign for India's economic prospects over the next few years.
Global outlook
Other global institutions optimistic
Other global institutions are also optimistic about India's economic performance. The World Bank recently revised its growth outlook for the current fiscal year to 6.6% from 6.3%, citing strong domestic demand and export performance as key factors. Similarly, the Asian Development Bank (ADB) has raised its estimate to 6.9% from an earlier forecast of 6.5%.
Conflict impact
IMF's global growth forecast
The IMF's projections are based on the assumption that the West Asia conflict will continue for a few more weeks before gradually normalizing. It also expects that disruptions will ease and the production and exports from the region will normalize by mid-2026. This is a key factor in the global growth forecast of 3.1% in 2026 and 3.2% in 2027, slower than the 3.4% recorded in 2025 due to disruptions from this conflict.
Economic risks
Global growth risks and challenges
The IMF has warned that under an adverse scenario with larger and more sustained energy price spikes, global growth could slow to 2.5% in 2026, and inflation would rise to 5.4%. In a more severe case involving major damage to the energy infrastructure, growth may drop to around 2%, with inflation exceeding 6% by 2027. The fund also noted that risks remain tilted toward the downside due geopolitical tensions, trade conflicts, and financial pressures.