India to Outpace China with 6.6% Growth in 2025 Despite US Tariffs: IMF
The International Monetary Fund projects India’s economy will grow at 6.6% in 2025, outpacing China’s 4.8% growth, despite ongoing US tariff pressures. Strong first-quarter performance has helped counter tariff impacts, though growth remains 0.2 percentage points lower than pre-tariff forecasts.
Key Takeaways
- India’s 2025 growth forecast: 6.6% (China: 4.8%)
- 2026 projection revised down to 6.2%
- Government maintains 6.3-6.8% GDP forecast for 2025-26
- Global growth at 3.2% in 2025, slowing to 3.1% in 2026
India’s Economic Resilience
The IMF’s World Economic Outlook report attributes India’s robust performance to strong domestic consumption and first-quarter economic activity. While US tariffs have created headwinds, the government remains confident in the economy’s fundamentals, maintaining its GDP forecast range of 6.3-6.8% for 2025-26.
India’s growth continues to outpace major economies, having recorded 6.5% growth in 2024-25. The country’s appears to be weathering global trade uncertainties effectively.
Global Economic Landscape
The IMF forecasts global growth at 3.2% in 2025, with a slight decline to 3.1% expected in 2026. Advanced economies are projected to average 1.6% growth, while emerging markets lead with 4.2% expansion.
Notably, the United States is expected to grow at 1.9%, down from 2.4% in 2024, while Spain emerges as the fastest-growing advanced economy with 2.9% growth.
IMF’s Warning on Global Volatility
“The global economy is adjusting to a landscape reshaped by new policy measures. Some extremes of higher tariffs were tempered, thanks to subsequent deals and resets. But the overall environment remains volatile, and temporary factors that supported activity in the first half of 2025 such as front-loading are fading.”
The IMF highlighted several risks to global stability, including “prolonged uncertainty, more protectionism, and labour supply shocks” that could further reduce growth. The organization also warned about fiscal vulnerabilities and potential financial market corrections.
To address these challenges, the IMF urged policymakers to “rebuild confidence using credible, transparent, and sustainable policies,” emphasizing that “fiscal buffers should be rebuilt, central bank independence should be preserved, and efforts on structural reforms should be redoubled.”
