India to grow 6.6% in 2026 on strong consumption, public investment: UN

New Delhi: The United Nations has raised India’s economic growth forecast for 2026 to 6.6% from the previously estimated 6.4% and set its forecast for 2027 at 6.7%, attributing this to resilient private consumption and strong public investment; these are expected to largely offset the impact of higher US tariffs on India’s exports.

Recent policy measures, including income tax cuts and rationalization of goods and services tax (GST) and lowering interest rates, are expected to provide additional impetus to short-term growth, it said.

According to UN global forecasts, India will continue to be one of the fastest growing economies.
India’s gross domestic product (GDP) is expected to grow by 7.4% in 2025, according to the World Economic Situation and Prospects 2026 report released by the United Nations Department of Economic and Social Affairs on Thursday.

Inflation in India is estimated to be 4.1% in 2026. In the period January-November 2025, the average was 2.3%.

On a financial year basis, the Indian economy is estimated to grow 7.2% in 2025-26 and 6.6% in 2026-27, the UN said. The country’s GDP will grow 7.4% in FY26, according to estimates released by India’s National Statistics Office on Wednesday.
The US imposed a 50 percent tariff on India, including a 25 percent penalty on importers of Russian oil. The US accounts for approximately 18% of India’s exports. But strong demand from other major markets, including Europe and West Asia, will partially cushion the impact, the UN said.

The outlook for South Asia remains solid, but growth is expected to slow from 5.9% in 2025 to 5.6% in 2026, before rebounding to 5.9% in 2027, according to the UN.

Globally, GDP growth is expected to be 2.7% in 2026; This is slightly below the 2.8% forecast for 2025 and below the pre-Covid-19 average of 3.2%.

“The combination of economic, geopolitical and technological tensions is reshaping the global landscape, creating new economic uncertainties and social vulnerabilities,” said United Nations secretary-general António Guterres.

“Many developing economies continue to struggle, and as a result progress towards the Sustainable Development Goals remains elusive for much of the world,” he added.

While the US economy is expected to grow 1.9 percent in 2025 and 2 percent in 2026, China’s growth is predicted to be 4.9 percent in 2025 and 4.6 percent in 2026.

In 2025, investment scenarios differed among developing economies. “India recorded strong growth in gross fixed capital formation, led by increased public spending on physical and digital infrastructure, defense and renewable energy,” the report said. “India has also strengthened its position in global electronics supply chains.”