The economic growth forecast for India was rather subdued in the recent reports by global financial institutions. US-imposed tariffs remain a key factor shaping future growth projections. The government is making a concerted effort to improve business conditions in the country. There is a push for opening more doors to establish global capability centres.
World Bank – The World Bank has recently released its South Asia Development Update, October 2025 report. According to the report, India is expected to remain the world’s fastest-growing major economy, underpinned by continued strength in consumption growth. Domestic conditions, particularly agricultural output and rural wage growth, have been better than expected. The government’s reforms to the Goods and Services Tax (GST), which reduce the number of tax brackets and simplify compliance, are expected to support economic activity. The forecast for FY26/27 has been downgraded, however, because of the imposition of a fifty per cent tariff on about three-quarters of India’s goods exports to the United States. India had been expected to face lower US tariffs than its competitors in April, but as of the end of August, it faces considerably higher tariffs. Almost one-fifth of India’s goods exports went to the United States in 2024, equivalent to approximately 2% of the country’s GDP. The forecast for FY2025/26 is 6.5%, which is 0.2% higher than the forecast reported in the Global Economic Prospects (June 2025), as cited by the Asia Law Portal. The forecast for FY 2026/27 is 6.5%, which is 0.2% lower than the forecast in the June 2025 report.
International Monetary Fund – The International Monetary Fund (IMF) recently released its World Economic Outlook (WEO) October 2025 report titled ‘Global Economy in Flux, Prospects Remain Dim.’ According to the report, India’s growth is projected to be 6.6% in 2025 and 6.2% in 2026. Compared to the July WEO Update (as reported by Asia Law Portal here), this represents an upward revision for 2025, with the carryover from a strong first quarter more than offsetting the increase in the US effective tariff rate on imports from India since July, and a downward revision for 2026. Compared with the pre-tariff forecast in October 2024 (as reported by Asia Law Portal), growth is projected to be cumulatively 0.2 percentage points lower.
The global economy is adjusting to a landscape reshaped by new policy measures. Some of the more stringent tariff measures were eased through subsequent trade agreements and policy adjustments. But the overall environment remains volatile, and temporary factors that supported activity in the first half of 2025, such as front-loading, are fading. As a result, global growth projections in the latest World Economic Outlook (WEO) are revised upward relative to the April 2025 WEO but continue to reflect a downward revision compared to the pre-policy-shift forecasts. Global growth is projected to slow from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026, with advanced economies growing at around 1.5% and emerging market and developing economies expanding by just above four per cent.
Maharashtra GCC Policy – India has been welcoming foreign companies to establish global capability centres (GCCs) in the country, with various states drafting their own GCC policies, as reported by the Asia Law Portal. The State of Maharashtra’s new GCC policy is expected to give a fillip to India’s largest office markets, including the Mumbai Metropolitan Region and Pune, while positioning the state as a preferred destination for multinational corporations setting up captive centres. The new policy aims to attract more multinationals to set up GCCs through fiscal incentives, single-window clearances, and infrastructure support, while promoting skill development in partnership with academia and industry. The state government aims to create approximately 400,000 jobs by 2030 through the GCC policy. It plans to roll out structured training and reskilling programmes focused on areas such as artificial intelligence, cybersecurity, data engineering, and design to align with GCC workforce requirements.
Companies Act Amendments – The Ministry of Corporate Affairs, Government of India, is finalising wide-ranging amendments to the Companies Act, which could include provisions for setting up risk management committees by firms, a stronger audit framework, and easier capital raising rules, according to people familiar with the development. The ministry aims to introduce the amendments in the winter session of Parliament, likely in November or December. Some of the other changes that are being discussed pertain to allowing companies to communicate with their members in only electronic form; replacing the requirement of affidavits for various purposes with self-declaration; permitting companies to hold general meetings in different modes (virtual, physical or hybrid); electronic platform for maintenance of statutory registers by companies; and easier restoration of companies stuck off from the register earlier upon meeting certain conditions.
