(MENAFN- Live Mint) The International Monetary Fund (IMF) has raised India's growth forecast by 0.2 percentage points to 6.6% for the 2025-26 fiscal year as the country's strong growth momentum is seen offsetting the impact of high U.S. tariffs on Indian goods.

India's GDP grew at an unexpectedly higher pace of 7.8% in April-June thanks to strong private consumption, helping it remain the fastest growing major economy despite a cloudy export outlook due to steep 50% tariffs imposed by U.S. President Donald Trump.

The IMF said in its World Economic Outlook report that the upward revision for India's 2025-26 growth was on a "carryover from a strong first quarter more than offsetting the increase in the U.S. effective tariff rate on imports from India since July".

Also Read | Mint Primer: US GDP contracts 0.3% in Q1-why the IMF still sees no recession

India's financial year runs from April to March.

However, the IMF lowered India's growth forecast by 0.2 percentage points to 6.2% for the next fiscal year, it said in the report released in Washington.

IMF's upgrade comes a week after the World Bank raised its India growth forecast for 2025/26 to 6.5% from 6.3%, while trimming its projection for the next fiscal year by 20 basis points to 6.3% due to U.S. tariffs.

The IMF has projected growth of emerging market and developing economies to moderate from 4.3% in 2024 to 4.2% in 2025 and 4% in 2026.

Also Read | US tariff effect: ADB trims India's growth outlook for FY26 and FY27 to 6.5%

"Beyond China, emerging market and developing economies more broadly showed strength, sometimes because of particular domestic reasons, but recent signals point to a fragile outlook there as well," it said.

Higher U.S. tariffs are curtailing external demand and rising trade policy uncertainty is weighing on investment in major export-led economies, the report said.

(Reporting by Nikunj Ohri and Manoj Kumar; Editing by Kim Coghill)

MENAFN14102025007365015876ID1110197308