India’s economy continues to impress globally, standing out as the fastest-growing major economy in 2025 with an expected growth rate of 6.3%, according to the United Nations’ mid-year update of the World Economic Situation and Prospects (WESP). Although this is slightly lower than the 6.6% forecast made earlier in January, India still leads well ahead of other big economies.
The growth is primarily driven by strong household consumption, robust government investments, and a surge in services exports. The outlook for 2026 remains positive with a projected growth of 6.4%, though slightly moderated from earlier expectations.
Globally, the situation is much more uncertain. The UN describes the world economy as being at a “precarious moment,” citing rising trade tensions and policy uncertainties that have led many countries to revise their growth forecasts downward. For instance, China’s growth is expected to slow to 4.6%, the US to 1.6%, Japan to 0.7%, and the European Union to just 1%, with Germany potentially contracting by 0.1%.
On the domestic front, inflation in India is expected to ease from 4.9% in 2024 to 4.3% in 2025, remaining within the Reserve Bank of India’s comfort range. Employment levels are generally stable, though the report highlights the ongoing need to address the gender gap in the workforce.
India faces some risks too, particularly the possibility of new US tariffs that could impact export sectors. However, exemptions currently granted to pharmaceuticals, electronics, energy, and copper may cushion the impact, at least temporarily.
These optimistic projections align closely with the International Monetary Fund’s recent outlook, which anticipates India’s growth at 6.2% for 2025 and 6.3% for 2026. Despite global uncertainties, India’s economic momentum remains strong and is expected to continue leading the way among major economies.
