India to outpace China with 6.6% growth in 2026, IMF estimates

The International Monetary Fund (IMF) has projected that India will expand by 6.6 % in fiscal year 2025-26, reinforcing its position as the world’s fastest-growing major economy, Reuters reported.

The upgrade reflects strong momentum in domestic consumption, manufacturing revival and robust services growth, the IMF asserted. The forecast places India ahead of other large economies, including China, whose growth for 2026 is pegged at around 4.8 %.

The IMF cited an unexpectedly sharp 7.8 % growth in India’s April-June quarter, which helped offset headwinds from higher U.S. tariffs and global trade uncertainty. The institution also raised its forecast modestly by 0.2 percentage points from its previous estimate of 6.4 %.

“India will still expand at a healthy pace of 6.6 % next year,” said the IMF in its World Economic Outlook report, adding that the country is expected to remain the fastest-growing economy among advanced, emerging and developing countries.

Economists underscore three key drivers behind this resilience: strong private consumption, infrastructure-led investment and reform momentum. “Growth is being driven by the private sector and the adoption of technologies developed elsewhere,” remarked Pierre-Olivier Gourinchas, Economic Counsellor at the IMF, during a press briefing.

Yet the forecast comes with caveats. The IMF warned of a fragile global backdrop, where trade policy shocks, investment slowdowns and structural constraints could weigh on growth. For 2026-27, it trimmed India’s growth outlook to 6.2 %, reflecting those risks.

India’s performance is set against a projected global growth of around 3.2 % in 2025, slowing to 3.1 % in 2026, according to the IMF. Advanced economies are expected to grow at just 1.6 % in the same period.

For policymakers in India, this favourable outlook raises new expectations. Analysts say the challenge now shifts from growth to how sustainably and inclusively it is delivered. “India must seize this opportunity to accelerate job creation, reduce poverty and invest in infrastructure, education and healthcare,” noted Dr Manoranjan Sharma of Infomerics Ratings.

The next few years will test whether India can convert headline numbers into broad-based gains. Structural reforms, labour-market upgrades and productivity improvements remain essential if the country is to move from rapid expansion to lasting development.