United Nations Department of Economic and Social Affairs (UN-DESA), in its flagship World Economic Situation and Prospects (WESP) 2026 report, has projected India’s GDP growth at 6.6% in 2026, down from 7.4% in 2025.
The moderation is attributed mainly to US-imposed tariffs on Indian exports, though India remains the fastest-growing major economy globally. India remains the fastest-growing major economy, despite global trade tensions and US tariffs.
Key Growth Projections
- India GDP growth
- 2025: 7.4%
- 2026: 6.6%
- 2027: 6.7%
- Despite moderation, India continues to outperform most major economies.
Why India’s Growth Remains Resilient
According to UN-DESA, India’s growth momentum is supported by:
- Resilient household consumption
- Strong public capital expenditure
- Tax reforms and monetary easing
- Ability to absorb global trade and policy uncertainty
Impact of US Tariffs on India
- United States share in India’s exports: ~18%
- UN-DESA warning: Persistent US tariffs could affect exports from 2026 onwards
- Why impact is limited:
- Strong domestic demand
- Key exports like electronics and smartphones likely to remain exempt
- Rising demand from Europe and the Middle East can offset losses
India in Developing Economy Context
- India and Indonesia highlighted as large developing economies with solid growth prospects
- Growth drivers:
- Robust domestic demand
- Targeted government policy measures
- Reinforces India’s position as a growth anchor of the Global South
Global Economic Outlook (WESP 2026)
- Global GDP growth
- 2025: 2.8%
- 2026: 2.7%
- 2027: 2.9%
- Outlook remains uncertain due to:
- Trade tensions
- Fiscal stress
- Geopolitical risks
Regional Trends
- United States & parts of Asia: Supported by domestic demand and policy easing
- Europe: Weak growth
- Developing economies: Constrained by high debt and climate shocks
Global Inflation Trends
- Global headline inflation
- 2025: 3.4%
- 2026: 3.1%
- Despite easing inflation:
- High food, energy and housing costs persist
- Low-income households most affected → rising inequality
India Inflation Forecast
- India inflation (2025): 4.1%
- Indicates relatively stable macroeconomic conditions
Global Trade Outlook
- Global trade growth
- 2025: 3.8%
- 2026: 2.2%
- Slowing trade momentum may affect export-led economies.
IMF Comparison
- UN-DESA projections broadly align with the International Monetary Fund (IMF) view:
- India likely to remain the only major economy growing above 6% during 2025–26
Reasons for Global Economic Slowdown
- Sticky core inflation, especially in services
- Rising trade protectionism and tariffs
- Structural challenges: ageing populations, low productivity, slow tech diffusion
- Weak multilateral cooperation and fragmented global governance
Key Recommendations (WESP 2026)
- Macro-policy coordination:
- Align monetary, fiscal and industrial policies
- Strategic fiscal policy:
- Credible medium-term fiscal plans
- Prudent debt management
- Multilateral cooperation:
- Implement Sevilla Commitment
- Expand concessional and climate finance
- Open, rules-based trade system:
- Transparency and predictability to limit fragmentation
About UN-DESA
- Mandate: Development pillar of the United Nations
- Headquarters: New York, USA
- Core Work Areas:
- Norm-setting
- Global economic & social analysis
- Capacity-building
- Key Functions:
- Produces flagship reports like WESP
- Supports SDG monitoring and implementation
- Provides policy advice and technical assistance
- Maintains global economic and social databases
- Major Reports:
- World Economic Situation and Prospects
- World Social Report
- Sustainable Development Goals Report