India's GDP growth: IMF revises 2025 forecast upwards to 6.6%; 2026 outlook revised downwards on Trump tariff impact

The International Monetary Fund (IMF) on Tuesday raised India’s GDP growth outlook for 2025 to 6.6% from 6.4% earlier, while downgrading the GDP growth projections for 2026 to 6.2%.

“In India, growth is projected to be 6.6 percent in 2025 and 6.2 percent in 2026. Compared with the July WEO Update, this is an upward revision for 2025, with carryover from a strong first quarter more than offsetting the increase in the US effective tariff rate on imports from India since July, and a downward revision for 2026. Compared with the pre-tariff forecast, growth is projected to be cumulatively 0.2 percentage point lower,” IMF said in its World Economic Outlook report for October 2025.


IMF projects global growth at 3.2 percent this year and 3.1 percent next year, a cumulative downgrade of 0.2 percentage point since its forecast a year earlier. It added that it is premature to conclude that the shock triggered by the US tariff surge had no effect on global growth.

“Advanced economies are forecast to grow about 1½ percent in 2025–26, with the United States slowing to 2.0 percent. Emerging market and developing economies are projected to moderate to just above 4.0 percent,” IMF said.

On Monday, IMF Managing Director Kristalina Georgieva expressed strong confidence in India. She particularly acknowledged India's reform initiatives and its successful digital implementation strategy.

"I'm very big on India because of the boldness of their reforms. For example, everyone told India that digital identity on a mass scale could not be done... but India proved them wrong," she said.

During the organisation's bi-annual meeting of finance ministers and central bank leaders, Georgieva praised India's economic and structural modifications. She particularly noted the changes in taxation, digital payments and Aadhaar implementation.

She specifically referred to the considerable GST modifications implemented in September.

This acknowledgment follows her recent statement from the previous week, where she recognised the economy as a 'key growth engine' in global recovery after the pandemic.

India has become essential to worldwide economic expansion, according to her observations.

She outlined four crucial factors supporting economic stability: strengthened policy foundations, corporate sector adaptability, lower-than-expected tariff effects, and supportive financial conditions.

According to IMF projections, India, currently the fastest-growing major economy, will surpass Japan to become the fourth-largest economy by nominal GDP soon. It is expected to advance further, moving past Germany to secure the third position after the US and China.

Despite facing challenges from the Donald Trump administration's 50% tariffs on US exports, economists believe India's GDP growth will remain largely unaffected due to its strong domestic economic fundamentals.