India is expected to remain the world?s fastest-growing major economy, says World Bank; Raises GDP forecast for FY26 to 6.5%

India is expected to remain the world?s fastest-growing major economy, underpinned by strong consumption growth, improved agricultural output and rural wage growth, the World Bank on Tuesday said. Moreover, the government?s reforms to the Goods and Services Tax (GST)?reducing the number of tax brackets and simplifying compliance?are expected to support activity. The forecast for FY26/27 has been downgraded, however, as a result of the imposition of a 50 percent tariff on about three-quarters of India?s goods exports to the United States, the Bank noted. India had been expected to face lower U.S. tariffs than its competitors in April but as of the end of August it faces considerably higher tariffs. Almost one-fifth of India?s goods exports went to the United States in 2024, equivalent to about 2 percent of GDP. The World Bank raised India?s gross domestic product (GDP) forecast for 2025?26 (FY26) to 6.5 per cent from 6.3 per cent projected in June and revised downwards the estimate for 2026?27 (FY27) by 20 basis points to 6.3 per cent due to higher-than-expected tariffs on India?s exports to the United States.

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