World Bank Lifts India’s FY27 Growth Outlook to 6.5% on Strong Demand and Exports

•  World Bank upgraded India’s FY27 economic growth forecast to 6.5%, from 6.3% projected in October 2025
• FY27 growth estimate remains unchanged from the June 2025 projection
• Upgrade driven by stronger domestic demand and more resilient export performance than earlier expected
• India is expected to remain the fastest-growing major economy globally
• Higher US tariffs on some Indian exports are not expected to derail growth, as impacts are offset by domestic demand strength
• Upside risks include possible resolution of global trade disputes and partial rollback of US tariffs
• Bilateral trade negotiations could boost exports and foreign capital inflows
•  Improved trade conditions may enhance business and consumer confidence, lifting investment and consumption
• AI and new technology investments identified as another upside risk, potentially accelerating productivity and job growth
• Growth is projected to rise to 6.6% in FY28, supported by services, export recovery, and higher investment
• Credit growth in India remains moderated by macroprudential policies, despite easier global financial conditions
• Fiscal consolidation is expected to continue, gradually reducing public debt-to-GDP ratio
• Services trade surplus likely to offset part of the merchandise trade deficit
• Inflation expected to converge to RBI’s target by FY27, assuming stable food prices
• Global growth projected at 2.6% in FY27, slightly lower than FY26 due to rising tariffs and weaker trade
• World Bank estimates FY26 growth at 7.2%, supported by strong consumption and rural income recovery
• Merchandise exports showed resilience despite higher US tariffs, aided by export market diversification