New Delhi, Apr 15 (KNN) The International Monetary Fund (IMF) has raised India’s GDP growth projections for the next two fiscal years, reaffirming the country’s position as the world’s fastest-growing major economy despite global uncertainties arising from the ongoing West Asia conflict.
Growth projected at 6.5 percent
In its April 2026 edition of the World Economic Outlook, the IMF has projected India’s growth at 6.5 percent for both FY2026-27 and FY202-28, reported The Times Of India.
“For 2026, growth is revised upward moderately by 0.3 percentage point (0.1 percentage point relative to January) to 6.5 percent, led by positive contributions from the carryover of the strong 2025 outturn and the decline in additional US tariffs on Indian goods from 50 to 10 percent, which outweigh the adverse impact of the Middle East conflict. Growth is projected to stay at 6.5 percent in 2027,” IMF said.
The upward revision reflects stronger-than-expected economic performance in FY2025–26, where growth is estimated at 7.6 percent, supported by sustained domestic momentum.
The Fund noted that the improved outlook is driven by positive carryover effects from robust growth in 2025, along with a reduction in additional US tariffs on Indian goods, which has helped offset the adverse impact of geopolitical tensions in West Asia.
Despite these positive projections, the IMF cautioned that the evolving conflict in the region poses risks to the global economic outlook. It has lowered its global growth forecast for 2026 to 3.1 percent from the earlier estimate of 3.3 percent, citing disruptions in commodity markets and rising energy prices.
Inflation pressure and multiple risk
Global inflation is now expected to rise to 4.4 percent in 2026, reflecting higher costs of key commodities such as oil, gas and fertilisers. The escalation of hostilities, including disruptions in critical shipping routes such as the Strait of Hormuz, has contributed to volatility in global energy markets.
The IMF outlined multiple scenarios for global growth depending on the duration and intensity of the conflict. In an adverse scenario, global growth could decline to 2.5 percent, while a more severe and prolonged crisis could push growth closer to 2 percent.
For India, the Fund indicated that while growth is expected to remain resilient, prolonged geopolitical tensions could exert upward pressure on inflation and impact overall economic momentum.
Estimates suggest that in a prolonged conflict scenario, India’s growth could moderate to around 6.1-6.2 percent, although it would still remain significantly higher than global averages.
The IMF also highlighted that emerging markets and developing economies are likely to face a disproportionately higher impact from the ongoing crisis compared to advanced economies, particularly due to their greater exposure to commodity price fluctuations and external sector vulnerabilities.
Overall, while risks persist, India’s growth outlook continues to be supported by strong domestic demand and macroeconomic resilience, positioning it favourably in the global economic landscape.
(KNN Bureau)
