The World bank has maintained India's economic growth rate for the financial year 2025-26 at 6.3 percent in its latest Global Economic Prospects report. In April, the bank reduced this estimate from 6.7 percent in january to 6.3 percent. The main reason for this is said to be the growing trade tensions and policy uncertainty at the global level.
Shadow of recession on the global economy
According to the report, due to increasing trade tensions and policy ambiguity, the global growth rate is estimated to be just 2.3 percent this year, which is the slowest pace since 2008 (if global recessions are excluded). In january this estimate was 2.7 percent. The World bank warned that if no concrete steps are taken soon, it could have a profound impact on human living standards.
India's latest performance and RBI's stance
Although India's GDP growth was 7.4 percent in the fourth quarter (Q4), the entire financial year FY25 grew at a rate of only 6.5 percent, which is the slowest growth since the Covid period. Despite this, the Monetary Policy Committee of the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india (RBI) has maintained GDP growth at 6.5 percent for FY26, but concerns remain about trade instability, especially regarding the new tariff policy of US President Donald Trump.
New direction of India-US trade relations
The US remained India's largest trading partner for the fourth consecutive year. In 2024-25, the trade figure between the two countries reached $ 131.84 billion. The US was a partner in 18 percent of India's exports, 6.22 percent imports and 10.73 percent of total merchandise trade. india also got a trade surplus of $ 41.18 billion with the US. Both countries are aiming to take this trade to $500 billion by 2030.
What does india want and what does America want?
india wants America to reduce import duties on its labour-based goods like textiles, gems, leather, clothing, plastic, chemicals, shrimps, oil seeds, grapes and bananas. At the same time, America wants india to exempt duty on electric vehicles, petrochemicals, wine, dairy, apples, nuts and genetically modified (GM) crops. Although india is still cautious about importing GM crops, it seems ready to import non-GM products like alpha-alfa hay (a type of animal feed)..jpg)
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