India is poised to maintain its status as the world’s fastest-growing major economy, with the International Monetary Fund (IMF) projecting a robust growth rate of 6.6% for the fiscal year 2025–26. This upward revision, from the previous forecast of 6.5%, highlights India’s economic resilience in the face of global trade uncertainties and rising protectionism. The IMF’s latest Regional Economic Outlook for Asia attributes this momentum to strong second-quarter performance and the successful implementation of GST 2.0 reforms, which have enhanced tax compliance, formalisation, and fiscal efficiency. Despite challenges posed by higher US tariffs, India’s diversified growth base—driven by services exports, infrastructure investment, digital transformation, and domestic consumption—is expected to cushion the impact. In contrast, China’s GDP growth is projected to moderate to 4.8% in 2025, weighed down by structural property-sector issues and weak domestic demand. The broader Asia-Pacific region is forecast to expand by 4.5%, contributing nearly 60% of global output growth. The IMF cautioned that Asia’s economic momentum could soften due to the ripple effects of US tariff hikes, which are already prompting exporters to front-load shipments. However, India’s reforms, including GST 2.0, improved logistics, and fiscal prudence, are expected to sustain medium-term expansion. The IMF also emphasised the need for Asian policymakers to deepen regional integration, reduce trade barriers, and improve productivity through better capital allocation. By 2026, India is projected to account for over 18% of Asia’s GDP expansion and nearly a fifth of global incremental growth, solidifying its role as a key pillar of stability and optimism in the region.
India defies tariff turbulence, set to outpace major economies with 6.6pc growth: IMF
