India projected to grow at 7.2 percent in 2025 26 as tariff impact expected to be offset
India is expected to record economic growth of 7.2 percent in 2025 26, with the negative impact of higher US tariffs likely to be offset by strong domestic demand, government spending and resilient services activity, according to a United Nations forecast.
India is projected to grow at a robust pace of 7.2 percent in the 2025 26 financial year, despite global headwinds and concerns over higher US tariffs. The forecast suggests that the overall impact of trade related pressures will be balanced by strong domestic drivers, allowing the economy to maintain momentum.
According to the United Nations assessment, India’s growth will continue to be supported by solid domestic consumption, public infrastructure spending and steady expansion in the services sector. These factors are expected to cushion the economy against external shocks, including slower global trade and tighter financial conditions in advanced economies.
The report notes that while higher US tariffs could affect certain export oriented sectors, their overall impact on India’s growth is likely to be limited. A diversified export base, growing domestic market and policy support are seen as key strengths that help absorb such pressures.
Investment activity is expected to remain healthy, backed by government capital expenditure and private sector interest in manufacturing and infrastructure. Initiatives aimed at improving logistics, boosting production and attracting foreign investment are likely to provide additional support.
Inflation is projected to remain manageable, giving policymakers room to focus on growth oriented measures. Stable macroeconomic conditions and a relatively strong financial sector are also expected to contribute to economic resilience.
The United Nations outlook highlights that India will remain one of the fastest growing major economies in the world. While risks remain from geopolitical tensions, commodity price volatility and global economic uncertainty, the underlying fundamentals are viewed as strong.
Overall, the forecast underscores confidence in India’s medium term growth prospects. With domestic demand acting as a key buffer, the economy is expected to navigate external challenges and continue on a path of steady expansion in 2025 26.
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