**World Bank Raises India’s FY26 Growth Forecast to 6.5%**

*By Mudit Dube | Oct 07, 2025, 05:30 PM*

The World Bank has revised India’s GDP growth forecast for the fiscal year 2025-26, projecting a stronger growth rate of 6.5%. Additionally, the bank anticipates robust economic performance in Q2 FY26, with GDP growth expected to reach approximately 7%.

**Trade Concerns Impacting FY27 Forecast**

Despite the positive outlook for FY26, the World Bank has downgraded India’s growth forecast for FY27 from 6.5% to 6.3%. This revision is largely attributed to the imposition of higher tariffs by the United States on Indian exports, which could dampen India’s economic momentum in the coming year.

According to the report, “India had been expected to face lower US tariffs than its competitors in April, but as of the end of August, it faces considerably higher tariffs.”

**Tariff Impact on India and South Asia**

Nearly one-fifth of India’s goods exports—accounting for about 2% of its GDP—are destined for the US market. The increased tariffs, introduced under US President Donald Trump’s administration, pose challenges not only to India’s growth prospects but also to the broader South Asian region.

The World Bank highlights that South Asia’s overall growth, projected at a robust 6.6% for 2025, could slow down to 5.8% in 2026 due to these trade measures.

As the global trade environment evolves, India and its neighbors will need to navigate these challenges carefully to sustain their economic growth trajectories.
https://www.newsbytesapp.com/news/business/world-bank-increases-india-s-fy26-growth-forecast-to-6-5/story