The International Monetary Fund raises India’s growth forecast to 6.6% for 2025 despite Trump’s tariffs

The International Monetary Fund’s (IMF) latest World Economic Outlook (WEO) forecasts India’s growth of 6.6% in 2025, underscoring its position as the fastest-growing major economy even as global production slows under the weight of new trade barriers imposed by the United States.

The October 2025 World Economic Outlook report shows that India is defying a broader slowdown that has engulfed advanced and emerging economies alike. The International Monetary Fund expects global growth to decline from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026.

In contrast, India’s revised upward forecast – up 0.1 percentage point from the July update – stems from a strong start to the year that offset the impact of higher US tariffs on Indian goods.

India recorded a strong GDP growth rate of 7.8% in the first quarter of FY25.

“In India, growth is expected to be 6.6 percent in 2025 and 6.2 percent in 2026. Compared to the July World Economic Outlook update, this is an upward revision to 2025, with a carryover from a strong first quarter offsetting the increase in the US effective tariff rate on imports from India since July,” the IMF said.

Compared to its pre-tariff forecast in October 2024, India’s overall growth loss remains marginal – just 0.2 percentage points lower cumulatively, the IMF added.

On the other hand, global momentum remains weak. Advanced economies are expected to grow by just 1.6% in 2025-26, with growth in the United States slowing to 2.0%, while growth in emerging markets and developing economies is expected to decline to just over 4%.

China, the hardest hit by escalating US tariffs, is expected to slow further to 4.8% in 2025 and 4.2% in 2026, mitigated only by a weaker currency, redirection of exports towards Asia and Europe, and some fiscal expansion. In Asia, India continues to support regional growth, supported by domestic consumption and steady investment flows.

At market exchange rates, the International Monetary Fund expects global output to grow by only 2.6% in 2025 and 2026, slowing from 2.8% in 2024.