India’s GDP Forecast 2025–26
Introduction
India’s economic momentum remains one of the strongest in the world, with global institutions projecting robust growth for 2025–26. The latest data from MOSPI places India’s nominal GDP for FY2024–25 at ₹324.11 lakh crore. Using the prevailing market exchange rate of around ₹89.64 per USD as of November 2025, this converts to approximately $3.62 trillion.
At the same time, the IMF’s World Economic Outlook (WEO) estimates India’s 2025 nominal GDP at about $4.13 trillion, along with a projected real GDP growth rate of 6.6 percent in 2025.
This article presents the latest GDP numbers, forecast comparisons from RBI, IMF, World Bank and rating agencies, and a detailed explanation of GDP conversions between INR and USD. It also provides insights for investors, policymakers, and advisors looking for data-backed guidance.
Latest GDP Snapshot: INR and USD Values
Nominal GDP (MOSPI)
- ₹324.11 lakh crore for FY2024–25.
- 1 lakh crore = 10¹²; therefore, ₹324.11 lakh crore = ₹324.11 × 10¹².
USD Conversion Using Current FX
- Market exchange rate (Nov 2025): ₹89.64 per USD.
- Conversion:
₹324.11 × 10¹² ÷ 89.64 ≈ $3.62 trillion.
This USD value differs from IMF estimates because the IMF uses its own methodology and calendar-year basis rather than market spot FX.
IMF Nominal GDP Estimate
- $4.13 trillion for 2025 (IMF WEO).
Quarterly Trend
MOSPI’s Q1 FY2025–26 estimate stands at ₹86.05 lakh crore, indicating continued expansion into FY2025–26.
India’s GDP Forecasts for 2025–26: Institution-by-Institution Breakdown
Reserve Bank of India (RBI)
RBI has projected real GDP growth for FY2025–26 at 7.3 percent, supported by domestic demand resilience, controlled inflation, and steady credit growth.
International Monetary Fund (IMF)
The IMF projects India’s real GDP growth at 6.6 percent for 2025, reflecting strong services activity and domestic consumption.
World Bank
The World Bank revised India’s FY2025–26 growth forecast upward to 6.5 percent, citing resilient demand, public capital expenditure, and moderating inflation.
Moody’s (Private Rating Agency)
Moody’s expects India to grow around 7 percent in 2025, supported by investment momentum and macroeconomic stability.
Across institutions, the forecast range remains between 6.5 and 7 percent, positioning India as the fastest-growing major economy globally.
What Is Driving India’s Growth Outlook?
Domestic Demand and Consumption
Robust household demand remains a major contributor to GDP expansion. Rising urban incomes and steady rural improvements support stable consumption patterns.
Public Capital Expenditure
Government-led infrastructure spending continues to accelerate, boosting construction, manufacturing, and allied sectors.
Investment Cycle Revival
Corporates have begun a measured capex recovery, aided by improved balance sheets and demand visibility.
External Headwinds
Despite strong domestic fundamentals, exports face challenges due to ongoing global trade tensions, including the impact of U.S. tariff changes on global supply chains. The World Bank has highlighted these risks in its regional outlook.
INR–USD Conversion: Why GDP Numbers Differ
GDP in INR is based on domestic price levels, while USD conversions depend heavily on the exchange rate used. Three common methods exist:
- Spot Market FX Conversion
- Real-time rate (₹89.64/USD) produces $3.62 trillion.
- Period Average FX
- Often used by institutions for comparability; may differ significantly from spot FX.
- Purchasing Power Parity (PPP)
- Adjusted for domestic price levels; India’s PPP GDP places it among the top three global economies.
IMF’s $4.13 trillion figure uses its standardized methodology rather than market FX, which explains the difference.
Risks and Upside Scenarios
Key Risks
- Global slowdown: Slower demand from advanced economies can affect India’s export sectors.
- Geopolitical tensions and commodity volatility: These may raise import costs, especially crude oil.
- US tariff changes: Potentially negative effects on India’s merchandise exports.
Upside Factors
- Lower inflation may allow monetary easing.
- Continued public infrastructure push.
- Strong service exports and resilient digital economy.
- Higher manufacturing output under PLI schemes.
Investment and Policy Implications
For investors, the key signals to monitor include:
- RBI’s monetary policy stance
- GST trends
- Services PMI and manufacturing PMI
- Global trade trends and commodity prices
- INR volatility and foreign fund flows
Long-term investors may continue to benefit from India’s structural growth story, supported by favourable demographics and improving productivity.
Frequently Asked Questions
Why do different agencies report different GDP numbers?
Agencies use varied methodologies: fiscal year vs calendar year, market FX vs PPP conversion, and different base-year adjustments. Hence INR and USD numbers differ across reports.
Which forecast is more reliable: RBI or IMF?
RBI reflects domestic, high-frequency indicators, while IMF focuses on global comparability. Together, they offer a balanced view.
How does the exchange rate affect GDP in USD terms?
Even if GDP grows in INR, a depreciating INR lowers the USD-denominated figure, affecting global GDP rankings.
Will U.S. tariff changes impact India’s GDP?
The World Bank has flagged potential risks to India’s exports from US tariff adjustments, though domestic demand could offset part of the impact.
Key Takeaways
- India’s FY2024–25 nominal GDP: ₹324.11 lakh crore, or approximately $3.62 trillion using current FX.
- IMF’s 2025 estimate: $4.13 trillion with 6.6 percent growth.
- Forecasts for FY2025–26 generally fall between 6.5–7 percent.
- Growth is supported by demand, investment, and public capex, though global risks remain.
- INR–USD conversion method significantly impacts reported GDP in USD.
Author Bio
Written by Rajesh Narayanan, a financial content specialist and MFD focusing on financial awareness, mutual funds, and personal finance.
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