Archive · 23 Jul 2025
ADB Lowers India's Growth Forecast Amidst US Tariffs
The Asian Development Bank (ADB) thinks India's economy won't grow as much as previously thought in 2026, predicting 6.5% instead of 6.7%.
This is because of potential problems from US tariffs and unclear government policies.
They also lowered the 2027 prediction a bit.
Good news is that the service and farm sectors should help things.
Also, the government will get a lot of money from the Reserve Bank of India, which can help the economy.
Lower interest rates and better investment could boost growth if things become more certain.
The cost of oil may be lower, too, which is also helpful.
ADB lowered India's FY26 growth forecast to 6.5% due to US tariffs and policy uncertainty.
The FY27 growth outlook was also reduced slightly to 6.7% from 6.8%.
Services and agriculture are expected to be key drivers of India's growth.
RBI will transfer a record ₹2.69 trillion as dividend to the Central government for FY25.
Rising investments and reduced repo rate may help improve growth if policy uncertainty decreases.
- Who
- The Asian Development Bank (ADB)
- What
- ADB has lowered India's GDP growth forecast for FY26 and FY27.
- When
- The forecasts are for FY26 and FY27, with updates released in reports.
- Where
- India
- Why
- Due to potential US tariffs, policy uncertainty, and global economic factors.
ADB Concerns
Positive Factors
US Tariffs and Policy Uncertainty
ADB Concerns
The impact of US tariffs and policy uncertainty could negatively affect growth.
Positive Factors
The impact of US tariffs and policy uncertainty could negatively affect growth.
West Asia Conflict
ADB Concerns
Re-escalation of West Asia conflict could disrupt shipping and raise oil prices.
Positive Factors
Re-escalation of West Asia conflict could disrupt shipping and raise oil prices.
- FY26 Growth Forecast (ADB)
- 6.5%
- FY27 Growth Forecast (ADB)
- 6.7%
- FY25 RBI Dividend
- ₹2.69 trillion
- Repo Rate Cut
- 50 basis points
- HSBC India Services PMI (June)
- 60.4