**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 growth rate of 6.5%. Additionally, the bank expects the Indian economy to grow around 7% in the second quarter of FY26, signaling a positive outlook for the near term.

**Trade Concerns Affect FY27 Forecast**

Despite the optimistic forecast for FY26, the World Bank has lowered its growth projection for FY27 from 6.5% to 6.3%. This downward revision is attributed to the impact of higher tariffs imposed by the United States on Indian exports, which could dampen India’s economic momentum in the coming year.

The report highlights that “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.”

**Impact of Tariffs on Exports and Regional Growth**

Nearly one-fifth of India’s goods exports were destined for the US in 2024, accounting for approximately 2% of the country’s GDP. The increased tariffs introduced under US President Donald Trump’s administration are anticipated not only to affect India but also to slow down economic growth across South Asia.

The region is projected to experience a strong growth rate of 6.6% in 2025; however, this is expected to decelerate to 5.8% in 2026 due to these trade measures.

In summary, while India’s short-term growth prospects remain robust, external trade challenges pose risks to its medium-term economic outlook, a concern echoed across the broader South Asian region.
https://www.newsbytesapp.com/news/business/world-bank-increases-india-s-fy26-growth-forecast-to-6-5/story