IMF Forecasts 6.5% Growth for India in FY 2027 Amid Inflation Surge

India's economy is projected to grow at a robust 6.5 percent in the fiscal year 2027, according to the International Monetary Fund, maintaining its status as the fastest-growing major economy despite escalating tensions in West Asia that have fueled higher inflation. The IMF's forecast, released this week, reflects an upward revision driven by strong performance in the prior year and eased trade pressures, even as global growth faces headwinds from the ongoing conflict.

The IMF raised its growth projection for calendar year 2026, which largely aligns with India's fiscal year 2027, by 0.3 percentage points from its October estimate and 0.1 points from January. This adjustment accounts for a better-than-expected economic outturn in 2025, now revised upward to 7.6 percent, including sustained momentum in the latter quarters. A key factor offsetting the conflict's drag is the reduction in additional U.S. tariffs on Indian goods, from 50 percent to 10 percent, which has supported exports and domestic demand. The fund anticipates steady growth at 6.5 percent in calendar year 2027, corresponding to India's fiscal year 2028, signaling resilience amid broader uncertainties.