The International Monetary Fund now expects India to become a $5‑trillion economy in FY29, a year later than its earlier FY28 projection and two years beyond New Delhi’s original FY27 ambition. Softer nominal GDP growth and a sharply weaker rupee are the key drags, though India still leads global growth tables.
India’s long-discussed $5‑trillion GDP milestone has been nudged further out on the horizon, with the IMF’s latest staff consultation report projecting the target will be reached only in FY29. Under the new baseline, India is seen crossing $4 trillion in FY26 and reaching about $4.96 trillion in FY28—just shy of the magic number and roughly $200 billion lower than the Fund’s February forecast for that year.
The downgrade stems less from real‑growth concerns and more from arithmetic in dollars. The IMF has sharply revised its rupee assumptions, now expecting a more pronounced depreciation, and trimmed nominal GDP growth estimates, reclassifying India’s exchange‑rate regime from “stabilised” to “crawl‑like”. Even so, India is still projected to be among the fastest‑growing major economies, powered by domestic demand, infrastructure capex and ongoing reforms, with upside if trade deals close and reform momentum holds.
Key highlights
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IMF now pegs India’s $5‑trillion GDP milestone at FY29, vs earlier FY28 estimate.
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GDP seen at ~$4 trillion in FY26 and ~$4.96 trillion in FY28, down from $5.15 trillion projected in February 2025 and $5.96 trillion in the 2023 consultation.
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Main drags: slower nominal GDP growth and steeper rupee depreciation; IMF now classifies India’s FX regime as “crawl‑like”.
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Despite delay, India remains one of the world’s fastest‑growing large economies, with robust domestic demand and reform support.
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Outlook could improve if global conditions stabilise, tariffs ease and pending trade agreements plus structural reforms advance.
Sources: IMF staff consultation report; Moneycontrol; Business Today; Business Standard; Free Press Journal; News18; The New Indian Express; India News Network; Angel One; News9