**World Bank Raises India’s FY26 Growth Forecast to 6.5%**
*By Mudit Dube | October 7, 2025, 5:30 PM*
The World Bank has revised its economic outlook for India, raising the growth forecast for the fiscal year 2025-26 to 6.5%. Additionally, the bank projects a robust GDP growth of around 7% for the second quarter of FY26.
**Trade Concerns Impacting FY27 Forecast**
Despite the optimistic forecast for FY26, the World Bank has lowered its growth estimate for FY27 from 6.5% to 6.3%. This revision reflects concerns about the impact of higher tariffs imposed by the United States on Indian exports, which could slow down India’s economic momentum in the following 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.”
**Effect of Tariffs on India and South Asia**
Nearly one-fifth of India’s goods exports went to the US in 2024, representing about 2% of the country’s GDP. The increased tariffs imposed by the US administration are anticipated not only to affect India’s growth but also to drag down the overall economic expansion in South Asia.
While South Asia is projected to experience a strong growth rate of 6.6% this year, the World Bank warns that the region’s growth could slow to 5.8% in 2026 due to these trade measures.
The evolving trade landscape underscores the challenges ahead for India and its neighboring countries as they navigate a shifting global economic environment.
https://www.newsbytesapp.com/news/business/world-bank-increases-india-s-fy26-growth-forecast-to-6-5/story
