The World Bank has revised its projection for India’s GDP growth for the fiscal year 2026-27 down to 6.3 %, a drop of 20 basis points from earlier estimates. This comes despite its forecast for the current year (FY2025-26) being raised to 6.5 %, reflecting stronger domestic momentum including robust consumption and rural wage growth.

The downward revision is attributed primarily to escalating trade tensions—especially the U.S.’s imposition of higher tariffs on Indian exports—as well as lingering global uncertainties that may dampen investment and external demand.

The Bank warns that India must execute structural reforms with urgency—particularly in manufacturing, exports, job creation and resolving bottlenecks—to sustain faster growth.

Nonetheless, India remains on track to be the fastest-growing major economy, and the Bank highlights that strong domestic fundamentals provide a cushion. However, the message is clear: without further reforms and an environment that unlocks investment, the aspiration of 7 %+ growth will remain challenging.

In short: India’s growth story remains strong, but the margin for error has narrowed. Policymakers now face a sharper imperative to act decisively.