New Delhi: The International Monetary Fund (IMF) on Tuesday upgraded India’s GDP growth projection for 2025 to 6.6%, higher than the previous estimate of 6.4%, reflecting the resilience of the Indian economy in the face of increasing US tariffs on Indian exports. The IMF, however, somewhat scaled down India’s 2026 forecast to 6.2%.
The revision captures India’s solid first-quarter performance that mitigated the tariff shock which started in July. In April–June 2025, the economy grew by 7.8%, the highest pace in five quarters, on the back of strong domestic demand, manufacturing growth, and government-sponsored capital spending. https://www.imf.org/en/Countries/IND
Strong Domestic Momentum Drives Growth
IMF Managing Director Kristalina Georgieva commended India’s reforms and digitization efforts, mentioning widespread adoption of digital identity systems, GST reforms, and growth in digital payments as major drivers behind economic resilience. “India’s flexibility enables it to thrive in the face of global challenges,” added Georgieva.
Worldwide, the IMF forecasted less growth, revising world GDP to 3.2% in 2025 from previous 3.3%, with advanced economies such as the US seeing only 1.5% growth in 2025-26. Emerging markets, however, led by India, are forecasted to sustain higher growth though slightly moderated from 4.3% in 2024 to 4% in 2026.
India will overtake Japan to become the fourth-largest economy by nominal GDP and will surpass Germany in the coming years, ranking just behind the US and China. Economists attribute the robustness of India GDP growth 2025 to cite the nation’s solid corporate sector, supportive financial conditions, and policy-driven reforms as a host of factors that will keep India GDP growth 2025 robust despite pressures from abroad in the form of trade tariffs.
Earlier in the month, the World Bank also increased India’s fiscal-year growth forecast to 6.5%, highlighting its position as the world’s fastest-growing large economy. Analysts believe that robust reforms, shrewd investments, and domestic demand will keep on insulating India from international headwinds, rendering it a prime driver of world growth.
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