India's Economic Outlook: OECD Forecasts Growth Amid Global Challenges

India’s GDP Growth Projected to Slow in Coming Years​

New Delhi, March 26 – The Organisation for Economic Cooperation and Development (OECD) has revised its economic outlook for India, projecting a GDP growth rate of 7.6 per cent for the current fiscal year and 6.1 per cent for fiscal year 2026-27. The OECD anticipates a further slowdown to 6.4 per cent for fiscal year 2027-28.

The OECD’s interim Economic Outlook report highlights the impact of the evolving conflict in the Middle East, stating it carries “human and economic costs” for directly affected countries and will test the global economy’s resilience. Disruptions to energy shipments through the Strait of Hormuz and damage to energy infrastructure have led to a surge in energy prices and disruptions to the global supply of commodities, including fertilizers.

Growth projections reflect a decline in US tariffs following a recent Supreme Court ruling. These reductions, particularly for emerging-market economies like India, are expected to support growth. However, the OECD notes that gas rationing will disrupt some production activities.

Inflation is also expected to rise. The OECD forecasts inflation to increase from 2 per cent in fiscal year 2025-26 to 5.1 per cent in fiscal year 2026-27 and 4.1 per cent in fiscal year 2027-28. The OECD anticipates India will raise policy rates temporarily in the second quarter of 2026 to combat stronger inflationary pressures.

Global GDP growth is projected to ease to 2.9 per cent in 2026 before edging up to 3 per cent in 2027. The OECD attributes this slowdown to the energy price surge and the uncertain nature of the conflict in the Middle East, which will increase costs and reduce demand, despite positive factors such as technology investment and lower tariffs.