US President Donald Trump has imposed 50 percent tariff on India, but his tariff does not seem to have any effect on India’s GDP growth. The International Monetary Fund on Tuesday (October 14, 2025) increased India’s gross domestic product (GDP) growth estimate for the current financial year to 6.6 percent. Earlier it was estimated to be 6.4 percent. This estimate has been raised with strong economic growth in the first quarter, which will limit the impact of US tariffs.
However, the Monetary Fund (IMF) in its latest World Economic Outlook report has reduced the growth rate estimate for 2026-27 by 0.2 percent to 6.2 percent. The report said, ‘Compared to the updated World Economic Outlook report of July, the growth rate estimate for 2025 has been increased.’
Compensation for increase in US duty rate
According to the report, ‘The strong growth in the first quarter is more than offset by the increase in US duty rates on imports from India since July. With this, the economic growth rate forecast for 2026 has been reduced.
It is noteworthy that India’s economic growth rate in April-June was 7.8 percent, which is the highest in five quarters. Earlier this month, the World Bank had also increased India’s GDP growth estimate for the current financial year from 6.3 percent to 6.5 percent. It was also said that the country will remain the fastest growing major economy.
6.4 percent economic growth rate for both 2025-2026
The IMF in July had revised its estimate of India’s economic growth to 6.4 percent for both 2025 and 2026. In the World Economic Outlook of April 2025, the country’s economic growth rate was estimated to be 6.2 percent for 2025 and 6.3 percent for 2026. The Monetary Fund said that the global growth rate is expected to decline from 3.3 percent in 2024 to 3.2 percent in 2025 and 3.1 percent in 2026.
This is higher than the estimate made in the July World Economic Outlook report, but overall 0.2 percent less than the estimate made before the policy changes in the World Economic Outlook for October 2024. The Monetary Fund said that the growth rate for emerging market and developing economies is expected to decline from 4.3 percent in 2024 to 4.2 percent in 2025 and four percent in 2026.
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