The growth mainly reflects robust domestic demand, including strong private consumption, supported by earlier tax reforms and improvements in real household earnings in rural areas, it said.
India’s Gross Domestic Product (GDP) is expected to grow 7.4 per cent in FY 2025-26, driven by a buoyant services sector, as per the first Advance Estimates released by the Union government.
Growth in India is projected to slow to 6.5 per cent in FY2026-27, assuming that the 50 per cent import tariffs by the United States remain in place throughout the forecast horizon, World Bank said.
Despite higher tariffs on certain exports to the United States, the growth forecast for 2026-2027 has remained unchanged relative to the June projections, primarily because the adverse impacts of higher tariffs will be offset by stronger momentum in domestic demand than previously anticipated, it said.
Growth is set to inch up to 6.6 per cent in FY2027-28, underpinned by robust services activity, as well as a recovery in exports and a pickup in investment, World Bank said.
