India is among the fastest-growing major economies. The World Bank forecasts 7.1 per cent growth for financial year 2027 (FY27), and the International Monetary Fund (IMF) projects 7.0 per cent for 2026. India continues to maintain its growth momentum and has addressed gaps created by geopolitical and global macroeconomic developments. Artificial intelligence (AI) regulation is slowly taking shape. Regional partnerships with other Asian countries remain a focus, with continuous engagement on economic agreements.
At a Glance
- World Bank FY27 growth forecast for India: 7.1 per cent, up from 6.6 per cent in April
- IMF growth projection for India: 7.0 per cent in both 2026 and 2027
- IMF global growth projection: 3.1 per cent in 2026, rising to 3.4 per cent in 2027
- AI regulation: a Central Government consultation paper on a techno-legal framework is due soon
- Trade: the 15th AITIGA Joint Committee met in Jakarta from 6 to 9 October 2026
What Does the World Bank Forecast for India?
The World Bank recently released its India Development Update, titled ‘India and Artificial Intelligence: Seizing the Development Opportunity’. In the report, the bank upgraded its FY27 (April 2026 to March 2027) growth forecast to 7.1 per cent, from 6.6 per cent in April (as reported by Asia Law Portal). It made the upgrade because growth has held up better than expected despite trade and geopolitical uncertainties.
Growth accelerated to 7.8 per cent in FY26 from 7.2 per cent in FY25. Strong investment and solid private consumption drove it, as the favourable policy and credit environment outweighed trade tensions. Rural consumption initially outpaced urban demand, supported by strong agricultural performance, rural income support, food subsidies and low inflation. Urban consumption strengthened later in the year following income tax relief and Goods and Services Tax (GST) cuts. The momentum carried into FY27, with gross domestic product (GDP) growing 7.8 per cent in the first quarter, above expectations, before moderating in later quarters.
Private consumption is expected to remain the main driver of growth. However, a rainfall deficit through August is likely to weigh modestly on rural demand, and government consumption will remain subdued. The investment outlook is broadly unchanged. Heightened global uncertainty is weighing on private investment as frontloading fades, partly offset by supportive financial and policy conditions, including stronger public investment. Exports have performed better than expected and are expected to provide the main upside to the FY27 growth outlook, relative to the April forecasts.
What Does the IMF Project for India?
The IMF recently released its October 2026 World Economic Outlook (WEO), titled ‘Resilience Under Strain, Urgent Choices’. The report says India remains among the fastest-growing major economies, with growth projected at 7.0 per cent in 2026. This reflects stronger-than-expected momentum, supported by resilient domestic demand and strong services activity. The IMF projects the same 7.0 per cent growth for 2027. This is an upward revision of 0.6 per cent for 2026 and 0.3 per cent for 2027, compared with the July 2026 WEO Update (as reported by Asia Law Portal).
India stands out with these upward revisions. They reflect sustained momentum and growing evidence of stronger growth potential, supported by favourable demographic dynamics, a large and expanding domestic market and continued structural reforms.
How Is the Global Outlook Changing?
Global economic activity has again proven resilient. The technology upturn, buffers and adaptations have helped mitigate the damage from geopolitics-driven disruptions. The IMF projects global growth to slow to 3.1 per cent in 2026 and rebound to 3.4 per cent in 2027. It expects global headline inflation to rise notably to 4.7 per cent in 2026, before easing to 4.1 per cent in 2027. Energy-importing economies outside the technology value chain face the most difficult outlook.
However, the margins of adjustment that supported resilience are not limitless, and risks are skewed to the downside. Further escalation of conflicts, a reassessment of expectations around AI, renewed trade tensions and fiscal vulnerabilities could weaken growth. On the upside, stronger momentum in AI investment and productivity gains from AI, or a sustained easing of geopolitical and trade tensions, could strengthen growth.
How Will India Regulate AI?
The Central Government will soon publish a consultation paper that will form the basis of India’s techno-legal regulatory framework for AI. The paper will focus on five areas:
- Safety
- Humanity
- Skilling
- Inclusivity
- Harm mitigation
The government’s view is that legislation alone cannot regulate AI. It wants a techno-legal approach, with stakeholders brought on board from the start. The Ministry of Electronics and Information Technology (MeitY) believes much of the implementation will fall to industry. Industry must take primary responsibility for addressing user harm, cybersecurity, safety, psychological disorders and deepfakes.
The position marks a notable shift. The government earlier believed it could address the risks and harms of AI through existing provisions under the Information Technology Act and its rules. It also amended the IT Rules to include provisions for synthetically generated information.
The government has also announced several other measures:
- It has begun the next stage of its long-term procurement of 10,000 graphics processing units (GPUs) and has already ordered 5,000 of them
- In the coming months, it will announce a three-to-four-year roadmap for using Indian-made GPUs for AI inference
- It will empanel AI models for official use in government departments
Where Do ASEAN-India Trade Talks Stand?
The Association of Southeast Asian Nations (ASEAN) hosted the 15th Joint Committee meeting of the ASEAN-India Trade in Goods Agreement (AITIGA), with related sub-committee meetings. They took place at the ASEAN Secretariat in Jakarta, Indonesia, from Tuesday 6 October to Friday 9 October 2026. The meetings were held in a hybrid format and reviewed progress on negotiations under the AITIGA review.
The Joint Committee directed all sub-committees to expedite pending chapters under the review and set firm, time-bound deliverables. It also urged close coordination to ensure measurable progress. India and ASEAN concluded by reaffirming their commitment to a balanced, constructive and forward-looking agreement. Both sides committed to resolving outstanding policy issues, deepening economic integration and modernising the agreement into a mutually beneficial framework that strengthens bilateral trade.
Why It Matters
For lawyers advising on India, two developments stand out. MeitY’s techno-legal approach puts primary responsibility for user harm, cybersecurity and deepfakes on industry, which is likely to shape compliance work for companies deploying AI. The AITIGA review also points to changes in India-ASEAN trade terms that cross-border clients will need to track.
