India growth upwardly revised by 30 bps to 6.5% in FY27 due to US tariff reduction: IMF
The IMF raised India’s growth forecast for calendar 2026 by 3 basis points to 6.5 percent, citing stronger-than-expected momentum carried over from 2025 and easing external trade pressures.
- Apr 14, 2026,
- Updated Apr 14, 2026 6:39 PM IST
India’s growth outlook has been revised upward in calendar year 2026 as the country continues to outperform much of emerging Asia, even as the Middle East conflict weighs on the broader regional and global economy, according to the International Monetary Fund.
The IMF raised India’s growth forecast for calendar 2026 by 3 basis points to 6.5 percent, citing stronger-than-expected momentum carried over from 2025 and easing external trade pressures. The upgrade reflects the resilience of domestic demand and the positive spillovers from a stronger-than-anticipated economic performance in the previous year.
India’s growth in calendar 2025 was also revised sharply higher by 1.0 percentage point to 7.6 percent, driven by better-than-expected activity in the second and third quarters, along with sustained momentum in the final quarter of the year. This stronger base has provided support for the outlook into the medium term.
It is also important to note that IMF calendar-year projections do not align directly with India’s fiscal year: IMF 2026 broadly overlaps with India’s FY27, while IMF 2027 corresponds broadly to India’s FY28.
For calendar 2027, India’s growth is projected to remain steady at 6.5 percent, indicating a stable medium-term path rather than further acceleration.
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The IMF noted that the 2026 upgrade is also supported by a reduction in additional US tariffs on Indian goods, from 50 percent to 10 percent, which has helped offset part of the adverse spillovers from the Middle East conflict. Despite global headwinds, India’s growth trajectory remains comparatively resilient within emerging Asia.
However, the broader regional outlook is weakening. Growth in emerging and developing Asia is projected to slow from 5.5 percent in 2025 to 4.9 percent in 2026 and 4.8 percent in 2027, as the Middle East conflict disrupts trade flows, financial conditions, tourism, and remittance inflows.
The IMF said the impact of the conflict varies across countries depending on exposure to energy imports, external financing conditions, and links through tourism and remittances. Several South and Southeast Asian economies are expected to face weaker domestic demand. The Philippines, for example, is projected to see a 1.5 percentage point downward revision in 2026 growth.
China’s outlook has been revised upward for 2026 to 4.4 percent, supported by lower US tariffs and policy stimulus, though structural headwinds are expected to weigh on growth in 2027.
Across emerging market and developing economies, growth is projected to slow to 3.9 percent in 2026 before recovering to 4.2 percent in 2027. The IMF said the Middle East conflict is lowering emerging market growth by 0.3 percentage point relative to pre-conflict forecasts, with commodity-importing economies particularly exposed.
While India remains a key growth driver within emerging Asia, the IMF cautioned that the external environment remains fragile, with geopolitical tensions and energy shocks continuing to shape the global outlook.
India’s growth outlook has been revised upward in calendar year 2026 as the country continues to outperform much of emerging Asia, even as the Middle East conflict weighs on the broader regional and global economy, according to the International Monetary Fund.
The IMF raised India’s growth forecast for calendar 2026 by 3 basis points to 6.5 percent, citing stronger-than-expected momentum carried over from 2025 and easing external trade pressures. The upgrade reflects the resilience of domestic demand and the positive spillovers from a stronger-than-anticipated economic performance in the previous year.
India’s growth in calendar 2025 was also revised sharply higher by 1.0 percentage point to 7.6 percent, driven by better-than-expected activity in the second and third quarters, along with sustained momentum in the final quarter of the year. This stronger base has provided support for the outlook into the medium term.
It is also important to note that IMF calendar-year projections do not align directly with India’s fiscal year: IMF 2026 broadly overlaps with India’s FY27, while IMF 2027 corresponds broadly to India’s FY28.
For calendar 2027, India’s growth is projected to remain steady at 6.5 percent, indicating a stable medium-term path rather than further acceleration.
ALSO READ: Banks to report steady earnings growth in Q4; private lenders’ profits seen growing faster than PSBs
The IMF noted that the 2026 upgrade is also supported by a reduction in additional US tariffs on Indian goods, from 50 percent to 10 percent, which has helped offset part of the adverse spillovers from the Middle East conflict. Despite global headwinds, India’s growth trajectory remains comparatively resilient within emerging Asia.
However, the broader regional outlook is weakening. Growth in emerging and developing Asia is projected to slow from 5.5 percent in 2025 to 4.9 percent in 2026 and 4.8 percent in 2027, as the Middle East conflict disrupts trade flows, financial conditions, tourism, and remittance inflows.
The IMF said the impact of the conflict varies across countries depending on exposure to energy imports, external financing conditions, and links through tourism and remittances. Several South and Southeast Asian economies are expected to face weaker domestic demand. The Philippines, for example, is projected to see a 1.5 percentage point downward revision in 2026 growth.
China’s outlook has been revised upward for 2026 to 4.4 percent, supported by lower US tariffs and policy stimulus, though structural headwinds are expected to weigh on growth in 2027.
Across emerging market and developing economies, growth is projected to slow to 3.9 percent in 2026 before recovering to 4.2 percent in 2027. The IMF said the Middle East conflict is lowering emerging market growth by 0.3 percentage point relative to pre-conflict forecasts, with commodity-importing economies particularly exposed.
While India remains a key growth driver within emerging Asia, the IMF cautioned that the external environment remains fragile, with geopolitical tensions and energy shocks continuing to shape the global outlook.