The International Monetary Fund (IMF) has upgraded India’s GDP growth forecast for the fiscal year 2025-26 (FY26) to 6.4%, up from its April estimate of 6.2%. In its World Economic Outlook report released on July 29, 2025, the IMF attributed the revision to a favorable global environment and stronger domestic economic conditions.
“This outlook reflects a slightly improved external environment compared to April,” the IMF noted, projecting a steady 6.4% growth for both FY25 and FY26. The forecast for FY26-27 was also raised from 6.3% to 6.4%, aligning closely with the Reserve Bank of India’s (RBI) estimate of 6.5%.
This optimism comes despite the Asian Development Bank (ADB) recently lowering its FY25 growth projection for India from 6.7% to 6.5%. The ADB, however, emphasized that India remains among the world’s fastest-growing major economies.
Globally, the IMF revised its 2025 growth forecast upward from 2.8% to 3.0%, driven by increased trade activity, lower-than-expected U.S. tariffs, a weaker U.S. dollar, and fiscal expansion in key economies.
Despite the upbeat projections, risks loom. The IMF cautioned that rising tariffs or unresolved trade disputes by the August 1 deadline could dampen growth. “Heightened uncertainty may slow economic activity,” the report warned, as the U.S. negotiates trade agreements to avert potential disruptions.