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World Bank Lifts India’s FY26 Growth Forecast to 7.2%, Keeps FY27 at 6.5% Under Tariff Assumption

The upgrade reflects robust domestic demand despite persistent U.S. trade barriers.

Vehicles pass in front of the World Bank building in Washington, D.C. on May 20, 2022. Picture taken with a long exposure. REUTERS/Raphael Satter
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Overview

  • The Global Economic Prospects report attributes the stronger FY2025-26 outlook to firm private consumption, recent tax reforms and higher real rural incomes.
  • India’s 2026-27 projection stays at 6.5% on the premise that 50% U.S. import tariffs persist, with growth seen edging to 6.6% in 2027-28 on resilient services, exports and investment.
  • The World Bank now pegs global growth at 2.6% in 2026, lifting the U.S. outlook to about 2.2% as AI-driven investment and limited tariff pass-through support activity.
  • Private estimates are higher for FY26, with Deloitte at 7.5–7.8% and Grant Thornton at 7.3–7.5%, both expecting some moderation in FY27.
  • Risks from trade policy and external uncertainty persist, and India’s Feb 27 GDP base-year revision could trigger changes to cross-agency forecasts.