The International Monetary Fund (IMF) has revised its growth projections for India, forecasting a robust 6.5% growth for both 2026 and 2027, despite the global economic disruptions caused by the ongoing war in West Asia. India remains the fastest-growing major economy, although the IMF's global growth forecast has been downgraded to 3.1% for 2026, a decline from its January projection. The IMF report highlights the toll the war has taken on global markets and supply chains, especially in sectors like energy, with gas supplies being disrupted globally, including in India. Nevertheless, the IMF remains optimistic about India’s economic performance, emphasizing its resilience amid external challenges.

In addition to India’s revised growth figures, the IMF's update reflects a better-than-expected economic performance in the latter half of 2025, leading to an upward revision in India’s growth for that year to 7.6%. The report attributes the continued growth in 2026 to factors such as the positive carry-over effect from 2025 and a reduction in US tariffs on Indian goods, although the Middle East conflict presents a moderating factor. Inflation is projected to rise moderately to 4.7% in 2026 before easing to 4% in 2027, largely driven by the higher costs of global energy and food prices linked to the ongoing conflict.

The IMF’s broader message focuses on the significant economic repercussions of the West Asia conflict, with global growth expected to slow to 3.1% in 2026 and 3.2% in 2027. The report uses a “reference forecast,” assuming a limited duration and intensity of the war, but cautions that a prolonged conflict could result in much larger economic damage, particularly to energy infrastructure. In a worst-case scenario, global growth could fall to just 2% in 2026.