India is projected to sustain its position as the fastest-growing major economy, with a growth rate of 6.7% in both FY26 and FY27, according to the World Bank’s latest Global Economic Prospects (GEP) report, outpacing a global growth projection of 2.7% for 2025-26.
The GEP report attributes India’s robust growth to a thriving services sector and a revitalized manufacturing base, driven by transformative government initiatives. From modernizing infrastructure to streamlining taxes, these measures are fueling domestic growth while positioning India as a cornerstone of global economic stability. As China’s growth slows to 4% next year, India’s ascent represents not just an economic milestone but a powerful narrative of innovation, ambition, and unmatched potential.
Complementing the World Bank’s insights, the International Monetary Fund’s (IMF) latest World Economic Outlook (WEO) forecasts a similarly strong trajectory for India, with growth projected at 6.5% for both 2025 and 2026. These consistent predictions underline the nation’s stable economic fundamentals and its ability to navigate global uncertainties effectively. Together, the World Bank and IMF projections underscore India’s growing prominence as a key driver of global economic growth.
The GEP report is a flagship publication of the World Bank that examines global economic trends and challenges, particularly in emerging markets and developing economies. The January 2025 edition marks a milestone, providing a comprehensive review of these economies’ progress since 2000 and their prospects for the next quarter-century.
India’s growth story stands out prominently in the report. Key findings include a stable annual growth rate of 6.7% for FY26 and FY27, robust performance in the services sector, and strengthening manufacturing activity supported by government efforts to enhance logistics and tax reforms. Private consumption is set to increase due to a stronger labor market, improved access to credit, and lower inflation, while investment growth remains robust, buoyed by rising private investments, better corporate balance sheets, and favorable financing conditions.
Globally, emerging markets and developing economies (EMDEs) now account for 45% of global GDP, up from 25% at the start of the century. India, alongside China and Brazil, has collectively driven approximately 60% of annual global growth since 2000, emphasizing the transformative role of these economies.
India’s impressive economic performance is underpinned by visionary government schemes. Infrastructure projects like the PM GatiShakti National Master Plan and initiatives like Startup India and the Production Linked Incentive Scheme are transforming key sectors. These reforms are fostering innovation, enhancing manufacturing capabilities, and promoting financial inclusion, reflecting India’s commitment to building a resilient and globally competitive economy.
India’s economic trajectory highlights its commitment to inclusive growth and innovation-driven development. With forward-thinking policies, a robust infrastructure, and digital transformation, the nation is redefining its global standing.
As the fastest-growing large economy, with consistent growth projected at 6.7% over the next two fiscal years, India continues to outpace its global peers. By fostering entrepreneurship, enhancing manufacturing, and streamlining governance, India is setting an example of resilience and strategic progress.
