India’s Growth Engine Accelerates: IMF Projects 6.6% GDP Expansion in FY 2025–26

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The International Monetary Fund (IMF) has revised India’s GDP growth forecast to 6.6% for FY 2025–26, citing strong Q1 performance and resilient domestic demand. India is set to outpace China’s projected 4.8% growth, reaffirming its position as the world’s fastest-growing major economy despite global trade tensions and tariff pressures.

IMF Upgrades India’s Growth Forecast to 6.6% for FY 2025–26

India’s economic momentum continues to defy global headwinds, with the International Monetary Fund (IMF) projecting a robust 6.6% GDP growth for the fiscal year 2025–26. The revised forecast, published in the IMF’s latest World Economic Outlook on October 25, 2025, marks an upward revision from earlier estimates and places India ahead of China, which is expected to grow at 4.8%.

The IMF attributes this optimism to India’s stronger-than-expected Q1 performance, buoyed by resilient private consumption, expanding manufacturing and services sectors, and sustained public and private investment. These factors have helped offset the impact of higher external tariffs and global trade frictions.

India’s reform momentum, digital infrastructure expansion, and fiscal discipline have further reinforced its growth trajectory. The IMF also emphasized the need for continued structural reforms and credible fiscal policies to maintain long-term stability and inclusive development.

Key Highlights and Strategic Insights

- Revised Growth Projection: India’s GDP is expected to grow by 6.6% in FY 2025–26, up from earlier estimates of 6.4%.

- Global Comparison: India is set to outpace China’s projected 4.8% growth, maintaining its lead among major emerging economies.

- Q1 Performance: A sharp 7.8% growth in the April–June 2025 quarter contributed to the upward revision.

- Domestic Drivers: Robust consumption, expanding industrial output, and infrastructure investments are fueling growth.

- Policy Recommendations: IMF urges India to sustain reform momentum and adopt credible fiscal strategies to mitigate external risks.

- Long-Term Outlook: India is on track to become the world’s third-largest economy by 2030, with a projected GDP of $7.3 trillion.

As global growth moderates to 3.2% in 2025 and 3.1% in 2026, India’s broad-based resilience positions it as a key driver of global economic recovery and a model for emerging market economies.

Sources: Outlook Business, New Indian Express, GoodReturns, Times of India.