India’s economic growth is expected to moderate slightly in FY26, with the World Bank revising its forecast to 6.3%, down from 6.7% estimated in January. Despite this downward revision, India is projected to remain the fastest-growing major economy globally, even as other leading economies such as China, the US, and those in the EU face economic slowdowns. The resilience of India’s economy highlights its strong fundamentals in the face of global uncertainties.
India first emerged as the world’s fastest-growing major economy in 2015, overtaking China in terms of GDP growth. This momentum was driven by a combination of favorable global conditions—such as low oil prices—and domestic macroeconomic stability supported by structural reforms. From 2015 to 2018, India’s GDP growth ranged between 7.5% and 8%, while China’s growth slowed to around 6.5–6.7% due to its shift from investment-led to consumption-led growth.
However, the period from 2019 to 2020 brought significant challenges. Growth began to slow in late 2018 due to banking sector stress, especially among NBFCs, declining private consumption, and sluggish investment. By FY2019–20, GDP growth had dropped to 5%, down from 6.1% the previous year, impacted by global headwinds, weakening demand in manufacturing and construction, and financial sector difficulties. The onset of the COVID-19 pandemic further compounded these issues, disrupting momentum across sectors.
