The World Bank has revised downward its growth forecast for India’s economy for the financial year 2025-26, projecting GDP growth at around 6.3%. The revision reflects concerns over a slowing global economy and weaker investment momentum.
In its latest outlook, the World Bank said that while India remains one of the fastest growing major economies, its pace of expansion is expected to moderate due to external and domestic challenges. The downgrade comes amid softening global demand, reduced export growth and uncertainty in international trade conditions.
The report noted that global economic weakness is affecting India’s exports, particularly in manufacturing and services. At the same time, private sector investment has been slower than anticipated, partly due to higher borrowing costs and cautious business sentiment.
Despite the lowered forecast, the World Bank highlighted that India’s growth continues to be supported by strong domestic consumption, ongoing infrastructure projects and government spending on capital expenditure. However, these factors may not be enough to fully offset the impact of weaker exports and global instability.
The institution also warned of risks from financial market volatility, rising geopolitical tensions and changes in monetary policy in advanced economies, which could further affect growth prospects.
Economists say the revised forecast underlines the need for policies that encourage Investment, Job creation and Export growth, while maintaining fiscal discipline and macroeconomic stability.
Although the growth estimate has been reduced, India is still expected to outperform most major economies in the coming year, according to the World Bank.
