India is expected to remain one of the fastest-growing major economies in the world, even as global growth slows down due to ongoing geopolitical tensions.
According to the latest economic update by the World Bank, India is likely to grow at around 6.6 per cent in FY27, IANS reported.
However, rising energy prices caused by the Middle East conflict and disruptions in global supply chains are expected to weigh on economic activity. These external pressures could impact growth, but India’s overall outlook remains relatively strong.
Economic resilience supported by strong fundamentals
The report highlights that India’s strong macroeconomic fundamentals provide a cushion against global uncertainties. Key factors supporting resilience include high foreign exchange reserves, low inflation, and a stable financial system.
Additionally, most of India’s public debt is denominated in the local currency, reducing vulnerability to external shocks. Efforts to diversify trade partners have also helped the country better manage global risks. These factors together act as a buffer, allowing India to maintain steady growth even in a challenging global environment.
Importance of private sector-led growth
The World Bank emphasised the need to strengthen private sector participation to sustain long-term growth. According to Paul Procee, boosting private investment will be key to creating jobs and improving economic resilience.
A stable and predictable business environment will play a crucial role in attracting investments. This will also help generate employment opportunities, especially for young people entering the workforce.
What sectors to focus on, to achieve a “Viksit Bharat”?
To achieve the vision of a developed nation, often referred to as “Viksit Bharat,” India needs to focus on priority sectors. These include energy, infrastructure, manufacturing, tourism, healthcare, and agribusiness.
Encouraging investment in these areas can help drive growth at scale and support long-term economic stability.
South Asia growth, global risks and policy challenges
The report also looks at the broader regional picture. Growth in South Asia is projected to slow to 6.3 per cent in 2026, down from 7 per cent in 2025, mainly due to disruptions in global energy markets. Despite this slowdown, South Asia is still expected to grow faster than most other emerging and developing regions. Growth is projected to recover to 6.9 per cent by 2027.
The global outlook remains uncertain. The report warns that prolonged conflict could reduce global growth by up to 1 percentage point. Inflation could also rise significantly, increasing pressure on economies worldwide.
The World Bank also noted the growing use of industrial policies across countries. In South Asia, governments are using such policies more frequently than in other regions, although results have been mixed.
While global uncertainties persist, India is well-positioned to maintain strong economic growth. With solid fundamentals and a focus on reforms, the country can continue to navigate challenges and sustain its growth momentum.
(With IANS Inputs)