India GDP growth projected at 6.4% this year: ESCAP

India’s economy is projected to grow at 6.4% in 2026, with a further uptick to 6.6% in 2027, according to a report by the United Nations Economic and Social Commission for Asia and the Pacific.

The estimates, outlined in the Economic and Social Survey of Asia and the Pacific 2026, position India as a key driver of growth in the South and South-West Asia region.

Growth moderates after strong 2025

The report noted that India’s economy expanded by 7.4% in 2025, supported by robust domestic consumption, particularly from rural demand, according to News On Air.

Additional factors included goods and services tax rate cuts and export frontloading ahead of tariff measures by the United States, which helped sustain momentum through the year.

At a regional level, economies in South and South-West Asia grew by 5.4% in 2025, up from 5.2% in 2024, with India playing a central role in that acceleration, the report said.

Inflation outlook remains stable

ESCAP projected inflation in India at 4.4% in 2026 and 4.3% in 2027, suggesting price stability alongside steady growth.

The outlook indicates a relatively balanced macroeconomic environment, with consumption continuing to underpin expansion while inflation remains contained within a manageable range.

Policy support and green transition

The report highlighted the role of policy interventions in shaping long-term growth, pointing to India’s production-linked incentive scheme as an example of how macroeconomic policy can support industrial development.

It noted that incentives for domestic manufacturing in sectors such as solar photovoltaic, batteries and green hydrogen are helping reduce import dependence while building new industrial capabilities, according to News On Air.

ESCAP also referenced estimates by the International Renewable Energy Agency, which suggest that global green jobs reached around 16.6 million, with annual additions of roughly 0.8 million between 2012 and 2024, reflecting a 7% growth rate.

Outlook tied to domestic demand

India’s growth trajectory is expected to remain anchored in domestic demand, particularly consumption trends and policy support mechanisms.

Sustaining this momentum will depend on continued investment, stable inflation and the pace of structural reforms, even as external factors such as trade dynamics and global demand remain variable.