The International Monetary Fund (IMF) has raised India's growth forecast for the fiscal year 2026 to 6.5% from its previous forecast of 6.4% made in January, according to its latest World Economic Outlook for April 2026, released on Tuesday.
The Indian economy is expected to grow faster than previously anticipated despite the war in the Middle East and growing geopolitical tensions.
"For 2026, growth is revised upward moderately by 0.3 percentage point (0.1 percentage point relative to January) to 6.5%, led by positive contributions from the carryover of the strong 2025 outturn and the decline in additional US tariffs on Indian goods from 50% to 10%, which outweigh the adverse impact of the Middle East conflict," the IMF said.
Growth is expected to be maintained at 6.5% in the fiscal year 2027.
In India, growth for fiscal year 2025 is revised upward by 1.0 percentage point from its earlier October forecast to 7.6%. This reflects "better-than-expected outturn in the second and third quarters of the fiscal year and sustained strong momentum in the fourth quarter," the IMF said.
Inflation in India is expected to return to near target levels after subdued food prices drove a marked decline in 2025.
The IMF's India growth projection for the current financial year is lower than the Reserve Bank of India's estimate of 6.9% and the World Bank's 6.6%.
At the global level, the IMF warns that the Middle East conflict would be a drag on growth and lead to inflationary pressure.
"Under the assumption of a limited conflict, global growth is projected at 3.1% in 2026 and 3.2% in 2027," the IMF said.