India is predicted to achieve a growth rate of 6.6 percent in 2026, showcasing remarkable progress in a challenging global setting, as stated by the United Nations. This growth is attributed to resilient private consumption and robust public investment, which are expected to counterbalance the impact of elevated US tariffs.
According to the World Economic Situation and Prospects 2026 report released by the UN Department of Economic and Social Affairs, India’s economic growth is anticipated to moderate from 7.4 percent in 2025 to 6.6 percent in the current year. Despite this moderation, India is poised to maintain its status as the world’s fastest-growing major economy.
The report highlights that while higher US tariffs may affect export performance in 2026, the demand from other significant markets such as Europe and the Middle East is projected to partially offset this impact. Key exports like electronics and smartphones are expected to remain unaffected by tariffs.
India’s growth trajectory is expected to be supported by resilient consumption and strong public investment, which are likely to counterbalance the adverse effects of increased US tariffs. The recent tax reforms and monetary easing measures are also anticipated to provide additional support to the economy.
Ingo Pitterle, Senior Economist at the UN DESA, emphasized that South Asia, led by India, will continue to be the fastest-growing region globally due to robust domestic demand, easing inflation, and supportive policy measures. The agency has significantly revised its GDP forecasts for India in 2025 and 2026, attributing the strong growth to various factors including consumer demand, public investment, and favorable agricultural conditions.
The report also acknowledges India’s efforts to diversify its export markets to regions like the European Union and the Middle East. It underscores the resilience of India’s services exports, particularly in the face of challenges posed by merchandise export tariffs.
Furthermore, the report underscores India’s stable macroeconomic indicators, including lower consumer price inflation, strong growth in fixed capital formation, and stable employment rates. The Indian rupee has shown resilience against the US dollar, supported by robust economic performance, despite external pressures.
In conclusion, the report highlights how India’s industrial policies have helped mitigate inflationary pressures by addressing structural supply constraints. Initiatives to enhance domestic production, modernize infrastructure, and improve logistics have not only boosted rural incomes and food security but also reduced dependence on imports and global shocks.
Overall, the global economic outlook remains subdued, with growth expected to be modest in major economies like Europe, Japan, and the US. However, countries like India, China, and Indonesia are anticipated to sustain solid growth driven by domestic demand and targeted policy interventions.
In the midst of evolving global economic dynamics, India’s position in global supply chains, particularly in the electronics sector, has strengthened. This underscores the country’s resilience and adaptability in navigating complex international trade scenarios.
