IMF Downgrades India's FY26 Growth Forecast to 6.2%, Cites Tariff War Impact

New Delhi (The Uttam Hindu): Amid global trade tensions and the US-China trade war, the International Monetary Fund (IMF) has cut India's economic growth forecast. In the World Economic Outlook Report 2025-26, the IMF has reduced India's projected GDP growth from 6.5% to 6.2%, giving rise to new concerns about the country's economic stability.

IMF gives India a jolt, cuts economic growth rate for FY26 to 6.2%; blames tariff war : IMF has said that global policy uncertainty has increased due to the reciprocal tariffs imposed by the US on many countries and the US-China trade war. This has a direct impact on investor sentiment and global economic flow. According to the report, it will have a negative impact on many emerging economies including India in 2025.

The IMF has cut its forecast by 30 basis points from its January 2025 estimate and said that even though India's situation is more favorable than other countries, the pace of growth may remain slow in 2025-26. This decline is being seen due to uncertainty in policy making, decline in global demand, and fear of external shocks. The Indian government’s statistics ministry had projected GDP growth for FY25 at 6.5%, and the Economic Survey 2026 put the growth range at 6.3–6.8%. The IMF’s revised estimates are well below these estimates.