**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, raising it to 6.5%. Additionally, the institution projects a robust growth of around 7% for Q2 FY26, indicating strong economic momentum for the country in the near term.
**Trade Concerns Impact FY27 Growth Outlook**
Despite the positive outlook for FY26, the World Bank has lowered its growth forecast for FY27 from 6.5% to 6.3%. This revision is primarily due to increased tariffs imposed by the United States on Indian exports, which could weigh on India’s economic performance next year.
The report highlights that while India was initially expected to face lower US tariffs compared to its competitors in April, by the end of August, it encountered significantly higher tariffs. This shift is a critical factor influencing the downward revision for FY27.
**Tariff Impact on India and South Asia**
India exports nearly one-fifth of its goods to the US, which accounted for approximately 2% of its GDP in 2024. The higher tariffs introduced under US President Donald Trump’s administration are anticipated not only to impact India’s exports but also to dampen overall economic growth across South Asia.
The World Bank’s report forecasts that South Asia’s growth rate, which is expected to be a strong 6.6% in 2025, could slow down to 5.8% in 2026 as a result of these trade measures.
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This updated forecast underscores the delicate interplay between global trade policies and regional economic growth, highlighting the challenges ahead for India and its neighbors.
https://www.newsbytesapp.com/news/business/world-bank-increases-india-s-fy26-growth-forecast-to-6-5/story
