IMF projects India to grow 6.6% in 2025–26, out-pacing China

The International Monetary Fund (IMF), in its October 2025 World Economic Outlook, has projected that India’s GDP will grow at 6.6% in 2025–26, reaffirming its position as the world’s fastest-growing major economy. In contrast, China’s growth is expected to moderate to around 4.8%, reflecting structural challenges such as weak property markets and subdued global demand. This projection highlights India’s resilience amid a volatile global environment and signals growing international confidence in its economic fundamentals.

The IMF attributed India’s robust growth to strong domestic demand, macroeconomic stability, and sustained reform momentum. Government-led infrastructure investments, expansion in manufacturing through initiatives like ‘Make in India’ and ‘Production-Linked Incentive (PLI)’ schemes, and a buoyant services sector — particularly in IT, financial, and digital services — have reinforced India’s growth trajectory. The institution also noted the importance of fiscal discipline and monetary prudence, which have kept inflation in check and boosted investor confidence.

However, the outlook also comes with cautionary signals. The IMF warned of external vulnerabilities, including the risk of slowing global trade, tightening financial conditions, and geopolitical tensions that could impact exports and capital flows. Additionally, India’s growth momentum depends heavily on sustaining employment creation, private investment, and export diversification.

In the medium term, experts suggest India must deepen structural reforms in labour, land, and financial markets, while accelerating the green energy transition to ensure sustainable growth. The IMF report underscores that India’s success story lies in balancing domestic consumption with productivity-driven expansion, digital innovation, and global competitiveness.

By outpacing China, India reinforces its image as the anchor of global growth — a key narrative shaping economic diplomacy and multilateral cooperation in the years ahead.