World Bank Projects India’s FY26 Growth at 6.3%

World Bank Projects India to Remain Fastest-Growing Major Economy in FY 2025-26

India is expected to maintain its position as the fastest-growing major economy, with the World Bank projecting a growth rate of 6.3% for the Financial Year 2025-26. This projection comes from the World Bank’s latest Global Economic Prospects report, which reflects confidence in India's continued economic resilience amid a challenging global environment.

The report notes that India's growth moderated in FY 2024-25, primarily due to a slowdown in industrial output. Despite this, the economy showed resilience as construction and services sectors remained stable, and agricultural output rebounded following severe drought conditions. This recovery was further supported by robust rural demand, which played a key role in sustaining economic momentum.

Looking ahead, the World Bank forecasts that India’s growth will strengthen further, reaching an average of 6.6% annually during FY 2026-27 and FY 2027-28. This projected rebound will be driven in part by robust services activity, which is expected to support a revival in exports, enhancing India’s external trade performance.

However, the report also casts a cautionary note on the global economic outlook. It highlights that global growth is likely to decelerate in 2025, impacted by intensifying trade tensions and persistent policy uncertainty. As a result, global GDP growth is projected to slow to 2.3%, marking the weakest pace since 2008 outside of major global recessions. This figure is also nearly half a percentage point lower than what had been forecast earlier in the year.

Despite these global headwinds, India’s strong domestic demand and resilient services sector are expected to shield its economy and keep it on a steady growth path, reinforcing its role as a key driver of global economic momentum.