India to Remain Fastest-Growing Major Economy in 2026: UN Report

The United Nations (UN) has projected India’s GDP growth at a strong 6.6 per cent in 2026, even as the global economy faces a slowdown driven by geopolitical tensions, trade disruptions, and policy uncertainty. According to the UN, worldwide economic growth is expected to decelerate to 2.7 per cent, highlighting India’s continued resilience amid challenging global conditions.

“Strong demand in major markets may partially offset the impact of US tariff hikes on India,” the report stated.

India’s Growth Outlook Remains Strong

Growth Projection Revised but Still Robust

While the United Nations (UN) has revised India’s growth estimate downward from an earlier projection of 7.4 per cent, the revised figure remains aligned with forecasts by the International Monetary Fund (IMF). The IMF has identified India as the only major economy expected to grow above 6 per cent in 2025–26, underscoring its relative strength compared to other large economies.

Global Economy Faces Prolonged Slowdown

UN Warns of Post-Pandemic Growth Challenges

The World Economic Situation and Prospects 2026 report cautioned that the global economy may experience a prolonged phase of slower growth compared to the pre-pandemic period. According to the UN, current growth rates are insufficient to deliver broad-based development benefits, leaving several countries, communities, and households behind.

Key Risks Highlighted by the UN

• Rising geopolitical tensions

• Persistent policy uncertainty

• Fiscal pressures across major economies

Trade Disruptions and Policy Uncertainty

Impact of US Tariff Hikes

The report noted that a sharp rise in United States tariffs in 2025 disrupted the global trade environment, although the global economy proved more resilient than initially expected. However, it warned that global growth is likely to moderate further in 2026, as weakening international trade will only be partially offset by continued monetary easing.

Inflation Eases, But Cost Pressures Persist

Household Budgets Under Stress

Although inflation has eased across most economies, the UN highlighted that rising living costs continue to strain household budgets and widen inequality. The report also warned of renewed supply-side risks, stemming from:

• Ongoing conflicts

• Climate-related disasters

• Trade fragmentation

• Persistent geopolitical tensions

India’s Domestic Growth Momentum

Strong FY 2025–26 Outlook

According to advance estimates released by the Ministry of Statistics, India’s real GDP growth is projected at 7.4 per cent in FY 2025–26, up from 6.5 per cent in FY 2024–25.

Quarterly Performance Signals Strength

India’s economic growth accelerated to 8.2 per cent in the second quarter (July–September) of the current financial year, compared to 5.6 per cent in the corresponding quarter of FY 2024–25, as per official data released in November.

These figures reinforce India’s position as the world’s fastest-growing major economy, despite global headwinds such as US tariff hikes and slowing international trade.

IMF Backs India’s Growth Leadership

The International Monetary Fund (IMF) has also reiterated that India will be the only major economy to grow above 6 per cent in 2025–26, even as tariff-related disruptions are expected to weigh heavily on global trade and overall economic expansion.

Conclusion

The UN’s latest economic outlook highlights India’s ability to maintain strong growth momentum amid a challenging global environment marked by geopolitical risks, trade tensions, and policy uncertainty.

With GDP growth projected at 6.6 per cent in 2026, and domestic indicators showing sustained economic strength, India continues to stand out as the fastest-growing major economy globally.

While external risks remain, strong domestic demand, resilient macroeconomic fundamentals, and policy support are expected to help India navigate global headwinds more effectively than its peers.