NEW DELHI: The Asian Development Bank (ADB) on Tuesday projected India’s growth at 6.5 per cent for 2025 (FY26) and 2026 (FY27), as it trimmed its growth outlook for developing Asia and the Pacific by 0.1 and 0.2 percentage points for this year and next, respectively, amid the emergence of a new global trade environment shaped by tariffs and updated trade agreements.
India’s GDP grew 7.6 per cent in H1 2025, as higher investment from strong public capital spending, offsets lower net exports and consumption despite firm rural demand, ADB said in a statement.
“Industrial growth likewise improved in India, with manufacturing and construction performing well, offsetting declines in mining and utilities, ” the report mentioned.
Manufacturing conditions strengthened in India and most ASEAN economies. Meanwhile, services PMI in India stayed strong, driven by rising demand for travel and recreation services.
“Rice prices are also projected to ease amid favourable weather conditions and record harvests in India, the world’s largest rice exporter, ” said the report.
Higher tariffs imposed by the United States and elevated trade uncertainty are expected to weigh on the region’s growth.
Inflation will continue to ease to 1.7 per cent this year amid lower prices for food and energy, before increasing modestly to 2.1 per cent next year as food prices normalise.
In India, CPI inflation stood at 2.07 per cent in August, remaining significantly lower than the 3.7 per cent reported a year ago. Food prices continued to decline for the third consecutive month, decreasing 0.7 per cent year-on-year, primarily due to lower costs for vegetables, pulses, and spices.