India continues to lead global growth in FY26 with a forecasted GDP expansion of 6.3%, outperforming China, the US, EU, and Germany. Powered by domestic consumption, demographic advantages, and strategic capital investments, India remains the fastest-growing major economy despite challenges like oil import dependency and weak exports.
India’s economy is forecasted to grow at a robust 6.3% in fiscal year 2025-26, according to estimates from the World Bank, maintaining its position as the fastest-growing major economy ahead of China, the United States, the EU, and Germany.
India first outpaced China in 2015, when a favorable global backdrop — including low oil prices — combined with macroeconomic reforms to propel annual GDP growth to between 7.5% and 8% during 2015–18. China, meanwhile, underwent a shift from investment-led to consumer-driven growth, slowing to approximately 6.5%–6.7%.
In 2019–20, India experienced a growth slowdown amid banking sector challenges and reduced private investment, with GDP growth slipping to around 5%. The COVID-19 pandemic then plunged the economy into a sharp contraction in FY21. However, a swift recovery followed, driven by renewed consumption, fiscal support, and essential policy reforms.
Looking ahead to FY26, India’s growth remains healthy at 6.3%, well above many industrialized nations. This resilience is supported by robust domestic demand, a demographic dividend, and substantial capital expenditure led by government infrastructure investments. These drivers continue to fuel expansion in housing, roads, and urban development.
Yet, certain vulnerabilities linger. India’s dependence on oil imports makes it susceptible to global price shocks, while its export sector remains subdued compared to high-performing peers.
The benchmark basis for comparison remains clear: China is adjusting to structurally slower growth, the US economy is moderating, and the EU and Germany are grappling with inflation and trade uncertainties. In contrast, India’s internal momentum is powering ahead.
The Reserve Bank of India (RBI) has maintained supportive monetary policy, and the flagship National Infrastructure Pipeline (NIP) continues to channel funds into strategic projects. Together with reforms and demographic strength, India is well-positioned to sustain its lead.
