Can India’s GDP Maintain a Strong Growth Rate Amid Geopolitical Risks?
Synopsis
Key Takeaways
- India's GDP growth is projected at 6.6 percent for 2026.
- Global economic growth is expected to slow to 2.7 percent.
- Strong demand in key markets is supporting India's growth.
- Geopolitical risks and policy uncertainties pose challenges.
- India remains the world's fastest-growing major economy.
New Delhi, Jan 8 (NationPress) A report from the United Nations (UN) unveiled on Thursday anticipates that India’s GDP will grow at a healthy 6.6 percent even as it predicts a global economic slowdown to 2.7 percent in 2026 due to geopolitical risks and policy uncertainty.
The report mentions, "Strong demand in major markets may partially mitigate the impact of US tariff increases on India."
Despite revising India’s growth forecast down from 7.4 percent, the UN’s outlook aligns with the IMF prediction, which identifies India as the sole major economy projected to achieve over 6 percent growth in 2025-26.
The UN’s 'World Economic Situation and Prospects 2026' report indicates that the global economy is at risk of entering a prolonged phase of slower growth compared to pre-pandemic levels, as current growth rates fail to generate widespread benefits, leaving many nations, communities, and families behind.
Factors such as geopolitical tensions, ongoing policy uncertainties, and fiscal challenges cast a shadow over the global economic landscape. In 2025, a significant increase in US tariffs disrupted the trade environment; however, the world economy exhibited greater resilience than anticipated.
The report forecasts a moderation in global growth in 2026, with reduced international trade being only partially countered by ongoing monetary easing support.
While inflation has notably decreased in many economies, the rising cost of living continues to burden household finances and intensify inequality. Elevated risks of renewed supply disruptions remain due to conflicts, climate-related catastrophes, trade fragmentation, and geopolitical strains, adding layers of uncertainty to the global outlook.
On the other hand, India’s real GDP growth is projected at 7.4 percent for FY 2025-26, an increase from 6.5 percent in FY 2024-25, according to advance estimates from the Ministry of Statistics released on Wednesday.
India's economy surged to an impressive 8.2 percent in the second quarter (July-September) of the current fiscal year, compared to 5.6 percent in the same quarter of FY 2024-25, as indicated by official data published in November.
These statistics confirm that India remains the world’s fastest-growing major economy, despite facing global challenges such as US tariff hikes.
The IMF projects India as the only economy expected to exceed a 6 percent growth rate in 2025-26, as the repercussions of US tariff policies are anticipated to disrupt global trade and decelerate the overall economic growth.