OECD raises India's GDP growth by 40 bps to 6.7% for FY26

The Organisation for Economic Cooperation and Development (OECD) in its latest 'World Economic Outlook' report has raised India's Gross Domestic Product (GDP) growth by 40 bps to 6.7% for fiscal year 2025-26 (FY26) from its earlier projection of 6.3% in June -- driven by strong domestic demand and robust GST reforms. It also projected the country’s GDP growth at 6.2% for FY27.

It mentioned that in India, higher tariff rates will weigh on the export sector, but overall activity is anticipated to be supported by monetary and fiscal policy easing, including the reform to the Goods and Services Tax (GST).

The report noted that the food price inflation has declined sharply in India, helped by strong domestic supply and export restrictions. It further said that amongst the G20, China, India, and Brazil face the highest increases in bilateral US tariff rates this year. Ongoing legal challenges and negotiations, and the risk of new tariffs on currently-exempt items, add to uncertainty about trade policies.

It also said global growth proved more resilient than expected in the first half of 2025, especially in many emerging markets. The OECD raised its growth forecast for the global economy to 3.2% for this year but kept its 2026 forecast steady at 2.9%, and said it expects global trade uncertainties sparked by U.S. tariffs will likely contract investment and trade in the second half of 2025.