ADB Revises India's Economic Growth Forecast Amid Global Uncertainty

The Asian Development Bank revised India's FY26 growth forecast to 6.5% due to trade uncertainties and US tariffs. Despite this, domestic consumption is strong, bolstered by rural demand and beneficial monsoon rains. The economy is projected to gradually improve in FY27 with rising investments and reduced policy uncertainty.

The Asian Development Bank (ADB) has downgraded India's economic growth forecast for the fiscal year 2026 from 6.7% to 6.5%, citing uncertainties in global trade and increased U.S. tariff rates as key factors.

Despite the revised projections, India is expected to remain one of the fastest-growing major economies. Economic activity within the country continues to be robust, supported by a surge in domestic consumption, especially due to revived rural demand. The services and agriculture sectors are poised to be significant growth drivers, aided by a favorable monsoon forecast.

Looking ahead, the Reserve Bank of India (RBI) has taken steps to bolster economic conditions, including a series of interest rate cuts and adjustments to the cash reserve ratio. These measures, alongside expected lower crude oil prices, are anticipated to support an economic upswing in FY27.

(With inputs from agencies.)