Overview

• India’s FY26 growth is now pegged at 6.5%, while the FY27 projection is trimmed to 6.3% due to higher-than-expected U.S. tariffs on Indian goods.
• The World Bank projects South Asia’s growth to ease to 5.8% in 2026 from 6.6% in 2025, citing the tariff drag on India among key factors.
• The United States imposed a 50% tariff on most Indian exports, affecting roughly $50 billion in shipments and pressuring textiles, gems and jewellery, and shrimp.
• The Bank says India remains the fastest-growing major economy on resilient consumption, with FY25 growth at 6.5% and a 7.8% print in the April–June quarter.
• Policy buffers include recent Indian tax cuts on consumer goods and vehicles, ongoing public infrastructure spending, GST simplification, and longer-term AI readiness noted by the Bank.