IMF Raises India’s Growth Forecast To 6.5% In FY27 After Eased Tariffs Despite War
· Free Press Journal
The Indian economy may grow at a rate of 6.5 percent in FY27 on the back of eased trade tariffs by the United States, according to the latest World Economic Outlook released by the International Monetary Fund.
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The global financial organisation said that the impact of the war in West Asia will be compensated by the reduction in import tariffs on Indian goods.
The IMF had earlier estimated a growth of 6.4 percent for the Indian economy in FY27. The US has reduced tariffs on Indian goods from 50 percent earlier to 10 percent now.
World Bank Raises India’s FY27 Growth Forecast To 6.6% On Back Of FTAs, Robust Domestic DemandIn the next financial year, growth is expected to remain stable at 6.5 percent. Hence, India will remain the fastest-growing economy in both financial years.
The World Bank had also revised the growth forecast for the Indian economy to 6.6 percent from 6.3 percent earlier. It argued that strong domestic demand and eased US tariffs would help the country sustain robust growth.
Although the IMF has also flagged the impact of the Gulf war on global growth prospects and inflation trends, it has reduced the global growth forecast for 2026 from 3.3 percent earlier to 3.1 percent now.
Retail Inflation Rises To 3.4% In March, Food Prices Push CPI Higher From February’s 3.21%It cited the surge in energy prices due to the US-Israel-Iran war. It said that the global growth forecast would have been raised had there been no war.
“Absent the war, global growth would have been revised upward. Indeed, forecasts based on pre-conflict assumptions would have shown a slight upward revision of 2026 growth relative to that forecast in the January WEO Update, by 0.1 percentage point to 3.4 percent,” it said.
Hence, the downward revision for 2026 largely reflects disruptions from the conflict in the Middle East, partly offset by carryover from recent strong data and reduced tariff rates, it added.
It warned that even if growth and inflation revisions seem relatively modest at the global level, the toll on the conflict region and more vulnerable economies—particularly commodity-importing emerging markets and developing economies with pre-existing fragilities—is much more pronounced.