Indian economy to grow 6.6% in 2025 despite US tariffs, projects IMF; warns of global 'uncertainty'

The Indian economy is growing at a rate of 6.6% in 2025, according to the International Monetary Fund (IMF) World Economic Outlook (WEO) report. This revision is due to the strong economic performance in the first quarter, which significantly offset the impact of rising US tariffs on Indian goods. However, compared to the pre-tariff forecast in October 2024, growth is expected to be 0.2 percentage points lower, the IMF said. India’s growth is expected to overtake China, which is expected to grow by 4.8%. The IMF published its updated forecasts after considering the impact of US tariffs on various economies and the resulting deals between nations amid growing uncertainty. The IMF cut its 2026 forecast for India to 6.2%, citing a possible slowdown in momentum for the first quarter. In 2024-25, the Indian economy grew by 6.5% in real terms. Despite uncertainties over US tariff, the government kept the GDP forecast for 2025-26 steady at 6.3-6.8%, reflecting confidence in the strength of the country’s domestic consumption, reports ANI. Where do global growth numbers stand? As a result of tariffs having a smaller impact than expected, the IMF forecasts global growth at 3.2% in 2025, slowing slightly to 3.1% in 2026. The IMF’s report mentioned that inflation is expected to decline globally, although with variation between countries, it is above target in the United States. Advanced economies are expected to grow by an average of 1.6%, while emerging economies are expected to grow by 4.2%. The 2026 forecast indicates a slowdown of 0.2%. The IMF noted that the US will grow at 1.9%, down from 2.4% in 2024, while Spain will be the fastest growing ‘advanced economy’, with a growth rate of 2.9%. IMF’s Global Economic Outlook The IMF’s October WEO forecasts are higher than their April projections, but still show a downward revision compared to pre-tariff policies. Highlighting the state of the global economy, IMF said: “The global economy is adjusting to a landscape reshaped by new policy measures. Some extremes of higher rates have been tempered, thanks to subsequent deals and resets. But the overall environment remains volatile, and temporary factors that supported activity in the first half of 2025, such as front-loading, are fading.” Meanwhile, “prolonged uncertainty, more protectionism and labor supply shocks” could dampen growth. While “fiscal vulnerabilities, potential financial market corrections and erosion of institutions could threaten stability.” The IMF called on policymakers to rebuild confidence using credible, transparent and sustainable policies, combined with trade diplomacy and macroeconomic adjustments. “Fiscal buffers must be rebuilt. Central bank independence must be preserved. Efforts on structural reforms must be redoubled”, the IMF said.