Particle.news

Download on the App Store

World Bank Lifts India’s FY26 Growth Outlook to 6.5% as Tariffs Cloud FY27

The Bank cites resilient consumption alongside recent GST changes as buffers against a potential 2026 slowdown.

Overview

  • FY27 growth is trimmed to 6.3% due to a 50% US tariff that now covers roughly three-quarters of Indian goods shipped to the American market.
  • A stronger-than-expected 7.8% GDP outturn in April–June, improved farm output, rising rural wages and GST simplification underpin the FY26 upgrade.
  • Nearly one-fifth of India’s goods exports went to the US in 2024, equal to about 2% of GDP, magnifying exposure to higher duties.
  • South Asia’s expansion is projected to slow to 5.8% in 2026 from 6.6% in 2025, with India still set to be the fastest-growing major economy.
  • The report highlights AI as both opportunity and risk, estimating about 22% of regional jobs exposed and urging trade openness, upskilling, infrastructure and labour mobility.