Archive · 23 Jul 2025
ADB, Ind-Ra Cut India’s Growth Forecast for FY26
Two financial groups, ADB and Ind-Ra, have lowered their economic growth predictions for India in 2025-2026.
They predict slightly slower growth than previously thought.
This is partially due to new tariffs from the US and uncertainty in the global economy.
However, factors like good rainfall, easier loan conditions, and lower inflation may help India's economy.
Despite the forecast cuts, India is still expected to be one of the fastest-growing major economies.
ADB and Ind-Ra reduced India's FY26 growth forecasts.
ADB projects 6.5% growth, Ind-Ra projects 6.3% growth for FY26.
US tariffs and global uncertainty are primary reasons for the revisions.
Domestic consumption and agriculture are expected growth drivers.
Monetary easing and favorable monsoons are potential tailwinds.
- Who
- Asian Development Bank (ADB) and India Ratings & Research (Ind-Ra)
- What
- ADB and Ind-Ra cut India’s growth forecast for FY26.
- When
- Forecasts were updated on July 23, 2025, for fiscal year 2025-26.
- Where
- India
- Why
- Due to US tariffs, global economic uncertainty, and weaker investment climate.
Positive Factors
Negative Factors
Impact of Headwinds vs Tailwinds
Positive Factors
Low inflation helps consumption demand, with monetary easing and better monsoons supporting rural demand.
Negative Factors
The impact of tailwinds is unlikely to fully alleviate the adverse impact of strong headwinds.
- ADB Growth Forecast (FY26)
- 6.5%
- Ind-Ra Growth Forecast (FY26)
- 6.3%
- RBI Growth Forecast (FY26)
- 6.5%
- Economic Survey Estimate
- 6.3% to 6.8%
- Primary Headwinds
- US tariffs & policy uncertainty
- Major Tailwinds
- Monetary easing, inflation decline, and favorable monsoons