India sustains growth amid global economic uncertainty

India's economy continues to demonstrate resilience amid global economic uncertainty, bolstered by strong domestic demand, infrastructure investment, expanding services, and manufacturing growth. Major institutions have revised their GDP forecasts upward, positioning India as a leading global growth engine. The country's export diversification, digital transformation, fiscal discipline, and energy security will further strengthen its competitiveness and sustain inclusive economic growth.

However, global growth is projected to slow from 3.5 percent in 2025 to 3.1 percent in 2026, before recovering to 3.4 percent in 2027. The Middle East conflict, higher oil prices, and trade-policy uncertainty are weighing on activity, partially offset by AI-driven investment. Headline inflation is expected to rise to 4.7 percent in 2026 before easing to 4.1 percent.

The baseline assumes the Strait of Hormuz reopens in March 2027, with a prolonged shipping disruption posing the main downside risk. Other risks include high public debt, rising borrowing costs that constrain fiscal responses, and a pullback in AI investment; the main upside is faster AI-led productivity growth.

Brief written by urgent.news from Qatar Tribune Business's own syndicated text. Machine-written — may contain errors; check the original before relying on it.