UN Projects 6.6% Growth For India Despite US Tariff Impact
United Nations- India is expected to achieve a growth rate of 6.6% in 2026, showing remarkable progress in a challenging global scenario. The United Nations Department of Economic and Social Affairs, in its World Economic Situation and Prospects 2026 report, highlighted that India’s resilient private consumption and robust public investment will counterbalance the impact of high US tariffs.
The report indicated that India’s economic growth is anticipated to slightly decrease from 7.4% in 2025 to 6.6% in 2026. Despite this moderation, India is poised to maintain its position as the world’s fastest-growing major economy.
Factors such as resilient private consumption, strong public investment, recent tax reforms, and lower interest rates are projected to support growth in the near term. However, the report cautioned that higher US tariffs could hinder export performance in 2026, especially if existing rates persist.
The report emphasized that India’s growth will be sustained by resilient consumption and robust public investment, which are expected to offset the negative impact of increased US tariffs. Recent tax reforms and monetary easing are also anticipated to provide additional support to India’s economic growth.
Ingo Pitterle, Senior Economist and Officer-in-Charge at the UN DESA, highlighted that South Asia, led by India, will continue to be the fastest-growing region globally. He attributed this growth to strong domestic demand, easing inflation, and continued policy support in India.
Shantanu Mukherjee, Director of the Economic Analysis and Policy Division at UN DESA, mentioned the diversification of India’s export markets to the European Union and the Middle East. He underscored the resilience of India’s services exports, especially in the context of tariffs affecting merchandise exports.
On the macroeconomic front, the report acknowledged India’s strong growth in gross fixed capital formation, driven by increased public spending on infrastructure, defense, and renewable energy. Employment indicators remained stable, with a slight increase in the labor force participation rate.
The report also highlighted the stability of the Indian rupee against the US dollar, albeit facing depreciation pressures due to portfolio outflows and higher US tariffs. Despite these challenges, the report expressed confidence in India’s robust economic performance supporting its currency in the short term.
Structural supply constraints in India have been addressed through industrial policies focusing on domestic production, modernization of infrastructure, and logistics improvements. These initiatives have not only bolstered rural incomes and food security but also reduced dependence on imports and exposure to global shocks.
Global Growth Seen At 2.7% This Year: UN Forecast
The United Nations projects global economic growth at 2.7% this year, slightly lower than previous estimates, citing the impact of higher US tariffs, economic uncertainties, and geopolitical tensions. The forecast indicates a modest increase to 2.9% by 2027, still below pre-pandemic levels.
UN Secretary-General Antonio Guterres highlighted the evolving global landscape shaped by economic, geopolitical, and technological tensions, leading to new uncertainties and vulnerabilities. Despite challenges, solid consumer spending and easing inflation have provided unexpected resilience in the face of increased US tariffs.
Growth in Europe, Japan, and the United States is expected to remain stable, with the US economy predicted to see a slight rise in growth. Japan and the European Union may experience moderate growth rates due to various factors such as tariffs and policy uncertainties.
Large developing economies like China, India, and Indonesia are forecasted to sustain solid growth, while prospects for low-income and vulnerable countries may be less favorable. However, least developed countries are expected to see an increase in growth, particularly in countries like Bangladesh, Ethiopia, and Tanzania.
In conclusion, the UN report underscores the complex interplay of economic, geopolitical, and technological factors shaping global growth patterns. While challenges persist, the resilience of certain economies and strategic policy measures offer hope for sustained growth in the coming years.
