Washington, April 9 (NationPress) The World Bank has reported that India's economy is experiencing a robust growth momentum, fueled by strong domestic demand, resilient services exports, and ongoing reforms. The growth rate is projected at 7.6% for the fiscal year 2025-26, surpassing previous estimates, which underscores the vitality of consumption and investment activities, as highlighted in the South Asia Economic Update.

Private consumption plays a pivotal role, with the report indicating that retail demand has remained consistent, bolstered by lower inflation, tax reforms, and a surge in consumer confidence, which peaked in late 2025, marking its highest level since the pandemic.

This solid domestic demand has compensated for the decline in goods exports. Merchandise shipments experienced slight growth, impacted by tariff disruptions, while services exports thrived, expanding by approximately 16% in recent months.

The services sector continues to be the backbone of this growth. Key areas such as information and communications technology and business services have shown steady expansion, contributing significantly to export earnings and overall economic activity.

Manufacturing is also witnessing an upswing. The report indicates that industrial activity has been vigorous, with manufacturing growth exceeding 10% annually from 2023 to 2025, primarily driven by sectors like electronics.

According to the World Bank, government incentives and increasing investment flows have underpinned this expansion. Production-linked incentive schemes and enhanced infrastructure have elevated output and competitiveness, as noted in the report.

India's trade outlook is now more favorable with new free trade agreements established with the European Union and the United Kingdom. These agreements are anticipated to lower tariffs on over 95% of traded goods, thus enhancing market access for Indian businesses.

The World Bank predicts that these reforms will likely facilitate broad-based consumption and increase real incomes for households, especially through reduced prices for manufactured products.

Macroeconomic stability has further solidified growth, with inflation remaining within the central bank’s target for most of 2025, aided by declining food prices. The Reserve Bank of India has reduced policy rates throughout the year, fostering consumption and investment.

India’s financial system has demonstrated stability, characterized by well-capitalized banks and improving credit conditions that support economic activity, according to the report.

The World Bank also emphasized that structural reforms have been crucial to India's economic performance. Initiatives to enhance infrastructure, reform tax systems, and fortify the financial sector have boosted productivity and investor confidence.

Although external risks, such as rising energy prices, remain, the report asserts that India's solid domestic fundamentals and reform trajectory position the nation favorably to maintain growth.

India has repeatedly surpassed growth expectations in recent years, reflecting its resilience and consistent policy support. In the long run, ongoing reforms and investments could further enhance its economic direction.