ADB Projects Robust Growth for India Amid Global Risks
The Asian Development Bank (ADB) has projected India’s GDP growth to remain strong at 6.9 per cent in the current fiscal year (2026–27), rising further to 7.3 per cent in the following year. According to its latest Asian Development Outlook report, the growth momentum will be driven by robust domestic demand, supported by easing financing conditions and reduced US tariffs on Indian goods. The report also highlighted that India’s economy expanded by 7.6 per cent in the previous fiscal, reflecting resilience fueled by steady public investment, tax cuts, and declining food prices.
However, ADB cautioned that escalating geopolitical tensions in West Asia could pose significant risks to India’s macroeconomic stability. A prolonged conflict in the region may lead to higher energy prices, disruptions in trade flows, and reduced remittance inflows, all of which are crucial to India’s external sector. Despite these concerns, the bank noted that ongoing domestic reforms, potential trade agreements with the European Union, and expected increases in government salaries could further strengthen economic growth in the coming years.
Inflation is expected to rise sharply to 4.5 per cent in the current fiscal, up from 2.1 per cent, driven by rebounding food prices, elevated global oil rates, currency pressures, and rising precious metal prices. Nevertheless, inflation is projected to ease to around 4 per cent in the next fiscal as oil prices stabilize. While higher oil costs could widen the current account deficit and increase input costs, ADB indicated that limited pass-through to domestic fuel prices may help cushion immediate impacts, albeit at the cost of increased fiscal pressure through higher subsidies.
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