India’s economy is projected to grow at 6.4% in 2026 and 6.6% in 2027, according to a report by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
The report noted that India’s growth reached 7.4% in 2025, supported by strong rural consumption, GST rate cuts, and export frontloading ahead of US tariff changes.
However, economic activity moderated in the second half of 2025 as exports to the United States declined by 25% following the imposition of higher tariffs. Despite this, the services sector remained a key growth driver.
Inflation in India is projected at 4.4% in 2026 and 4.3% in 2027, indicating relatively stable price conditions.
The report highlighted broader regional trends, noting that foreign direct investment (FDI) into developing Asia Pacific economies declined by 2% in 2025, amid geopolitical tensions and trade uncertainties.
Despite this, India remained among the top destinations for greenfield investments, attracting around $50 billion in announced projects, alongside countries like Australia and South Korea.
Remittances continue to play a crucial role in supporting household consumption. India, the world’s largest remittance recipient, received about $137 billion in 2024. However, new measures such as a 1% US tax on remittances from 2026 could impact inflows.
The report also pointed to opportunities in the green economy, with India accounting for 1.3 million of the world’s 16.6 million renewable energy jobs.
It highlighted initiatives like India’s Production Linked Incentive (PLI) scheme as key drivers of clean technology manufacturing, helping reduce import dependence and create new industrial ecosystems.
Keep building. Keep learning. Keep growing with StartupByDoc.