India’s Economy Projected To Grow At 6.4% This Year: UN Report

UNITED NATIONS, Apr 21: India’s economy is projected to grow at 6.4 per cent in 2026 and 6.6 per cent in 2027, according to a report by the United Nations.

The report by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), released Monday, said South and South-West Asian economies expanded by 5.4 per cent in 2025, up from 5.2 per cent in 2024, largely driven by strong growth in India.

India’s economy grew 7.4 per cent in 2025, supported by robust consumption, particularly in rural areas, along with GST rate cuts and export frontloading ahead of tariffs imposed by the United States.

However, growth moderated in the second half of 2025 as exports to the US fell by 25 per cent following the imposition of 50 per cent tariffs in August 2025. The services sector continued to remain a key growth driver.

Inflation in India is projected at 4.4 per cent in 2026 and 4.3 per cent in 2027, the report said.

The ESCAP report noted that foreign direct investment inflows into developing Asia-Pacific economies declined amid trade tensions and geopolitical uncertainties. FDI to the region fell by 2 per cent in 2025 after a 0.6 per cent increase in 2024, even as global flows rose by 14 per cent.

India remained among the top destinations for greenfield FDI, attracting USD 50 billion in announced investments during the first three quarters, alongside countries like Australia, the Republic of Korea and Kazakhstan.

The report also highlighted the role of remittances in supporting household consumption across the region. However, it warned that India, the world’s largest remittance recipient with USD 137 billion in 2024, may face losses after the US imposed a 1 per cent tax on remittances from January 2026.

Additionally, the report cited estimates by the International Renewable Energy Agency (IRENA), stating that global green jobs reached 16.6 million, with India accounting for 1.3 million.

It emphasised that governments can leverage the transition to clean energy to boost domestic industries, noting that India’s production-linked incentive scheme is fostering manufacturing in solar, batteries and green hydrogen sectors.

The report added that targeted industrial policies across Asia-Pacific are accelerating clean technology manufacturing and supporting the shift towards sustainable economic growth. (Agencies)