India's Economic Resilience Amid Global Challenges: IMF Insights

The International Monetary Fund projects India's economy to grow at 6.6% in 2025-26 despite US-imposed tariffs. The Goods and Services Tax reforms and other structural reforms are expected to bolster growth. However, risks such as geoeconomic fragmentation and weather shocks remain. Fiscal and corporate sectors are resilient, with inflation contained.

The International Monetary Fund has projected that India's economy is poised for a 6.6% growth rate in the fiscal year 2025-26. This comes despite ongoing challenges such as the 50% tariffs imposed by the US on India, including taxes on Russian energy purchases.

Key reforms, such as the Goods and Services Tax (GST), are expected to play a significant role in cushioning the adverse impact of these tariffs. The IMF underscores the need for advancing comprehensive structural reforms to sustain robust growth and support India's aspirations in becoming a more advanced economy.

While India shows resilience with sound macroeconomic policies, IMF cautions about potential risks. Geoeconomic fragmentation, financial tightening, and weather anomalies could impact growth. Nonetheless, the financial and corporate sectors' robustness, along with controlled inflation, provide a stable backdrop for economic expansion.

(With inputs from agencies.)