India’s growth outlook has been revised upward by the World Bank, reflecting strong domestic demand, resilient exports and the support of recent trade agreements. The institution expects India to remain the main driver of growth in South Asia, even as the global environment remains uncertain. The update also notes that private consumption has stayed firm, helped by low inflation and changes in Goods and Services Tax rates.
Growth Forecast for India
India’s growth projection for the current financial year has been raised from 6.3 per cent to 6.6 per cent. The World Bank also estimates that growth accelerated from 7.1 per cent in FY25 to 7.6 per cent in FY26. This improvement is linked to strong domestic demand and export resilience.
Drivers of Domestic Demand
Private consumption has remained robust. Low inflation has supported household spending. Rationalisation of GST rates has also helped consumer demand. The report expects the GST rate cuts to continue supporting consumption in the first half of FY27.
Trade and External Support
The growth outlook is strengthened by tariff cuts and recent trade agreements. These include free trade agreements with the United Kingdom and the European Union. Such measures are expected to improve market access and support exports.
Risks and South Asia Outlook
The report warns that elevated global energy prices may increase inflationary pressure and reduce disposable income. Despite this, South Asia’s growth prospects remain strong, with India seen as the primary engine of regional growth.
Last Modified: April 28, 2026