India Economic Growth to Hit 6.4% in 2026 Despite Global Pressures: UN Report

India economic growth is projected to reach 6.4% in 2026 and 6.6% in 2027, according to a United Nations report, highlighting the country’s resilience amid rising global uncertainty.

The Economic and Social Survey of Asia and the Pacific 2026, released by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), noted that India remains a key driver of regional expansion. Economies in South and South West Asia grew by 5.4% in 2025, up from 5.2% in 2024, largely supported by strong performance in India.

India’s economic growth stood at 7.4% in 2025, driven by robust consumption, particularly from rural areas, along with goods and services tax rate cuts and export frontloading ahead of United States tariff measures.

Growth Moderates Amid Global Headwinds

However, the report highlighted that economic activity in India slowed in the second half of 2025. Exports to the United States declined by 25% following the imposition of 50% tariffs in August 2025, reflecting the growing impact of global trade tensions.

Despite these challenges, the services sector continued to act as a key growth engine. The report also pointed to rising geopolitical conflicts and increasing trade protectionism as major risks weighing on the broader Asia Pacific economic outlook.

Inflation in India is expected to remain stable, projected at 4.4% in 2026 and 4.3% in 2027.

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Investment, Remittances and Emerging Risks

The report flagged a decline in foreign direct investment flows to developing Asia Pacific economies, which fell by 2% in 2025 despite a rise in global flows. Within the region, India remained among the top destinations for greenfield investments, attracting around USD 50 billion in announced projects.

Remittances continue to play a crucial role in supporting household consumption. India, the world’s largest recipient of remittances at USD 137 billion in 2024, relies significantly on these inflows for essential spending such as healthcare.

However, new challenges are emerging. The report warned that a 1% tax imposed by the United States on remittances since January 2026 could impact inflows, potentially affecting household consumption.

The report also highlighted broader global trends, including the steady growth of green jobs, which reached 16.6 million worldwide, reflecting a shift towards sustainable economic models.

Overall, India economic growth remains strong, but the UN report suggests that external risks and evolving global dynamics will continue to shape the country’s economic outlook in the coming years.