World Bank Raises India’s FY26 Growth Forecast to 7.2% Amid Global Trade Tensions

The global economy is currently a “mixed bag” of resilience and record-high debt, but India is staying in the fast lane. As of Wednesday, January 14, 2026, the World Bank has officially bumped India’s growth forecast for FY2025-26 up to 7.2%.¹

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The thing is, this is a massive jump from their gloomy 6.3% prediction back in mid-2025.² Or nothing. Let’s be real, while most of the world is bracing for a “stagnant decade,” India is leaning hard on its own internal motor. Those too.

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The “Resilience” Log: Field Notes

It’s an ongoing situation where domestic spending is basically keeping the lights on while global trade gets messy.³

• The “Trump Tariff” Assumption: The World Bank is baking in a 50% US import tariff into its math for next year.⁴ The thing is, they expect India’s growth to dip to 6.5% in FY27 because of it.⁵ But here’s the kicker—even with those “trade walls,” they think our services and internal consumption are so strong it won’t trigger a full-blown crisis.

• Rural Recovery: After a rough few years, rural India is finally spending again. The thing is, better rabi crop sowing and tax reforms have actually put real cash back into household pockets.⁶ And then there’s the GST 2.0 effect, which is making business a lot smoother.

• The Global “Weak Decade”: The report warns that the 2020s are on track to be the weakest for global growth since the 1960s.⁷ The thing is, Chief Economist Indermit Gill says the world is carrying “record levels of debt.”⁸ It’s an ongoing situation where India is the “bright spot,” but we’re surrounded by some pretty dark clouds.

• Investment Surge: While merchandise exports are struggling, investment flows and AI-driven tech productivity are picking up the slack.⁹

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Growth Outlook: The Big Picture (2026)

And Here’s the Kicker…

India’s own government (NSO) is even more bullish, putting the number at 7.4%.¹⁴ The thing is, the World Bank is being “conservative” by sticking to 7.2%. And then there’s the February 27 update—that’s when India releases its new GDP base year (2022-23), which might make these numbers look even better overnight.

It’s an ongoing situation where India is essentially “uncoupling” from the global gloom. If we can navigate the trade friction with the US, 2026 might actually be the year India cements its spot as the world’s third-largest economy.

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