Blitz Bureau
NEW DELHI: India’s economy is maintaining strong growth momentum, driven by robust domestic demand, resilient services exports and sustained reforms, the World Bank said in its latest report. Growth is estimated at 7.6 per cent in fiscal year 2025-26, higher than earlier projections, reflecting the strength of consumption and investment activity, according to the South Asia Update.
Private consumption has been a key driver. The report said retail demand has remained steady, supported by lower inflation, tax rationalisation and rising consumer confidence, which reached its highest post-pandemic level in late 2025. Domestic demand has helped offset weakness in goods exports. Shipments of merchandise grew marginally, affected by tariff disruptions, but services exports remained strong, expanding by about 16 per cent in recent months.
The services sector continues to anchor growth. Information and communications technology and business services have expanded steadily, contributing to export earnings and economic activity. Manufacturing has also picked up pace. The report noted that industrial activity has been strong, with manufacturing growing by more than 10 per cent annually between 2023 and 2025, led by sectors such as electronics.
According to the World Bank, Government incentives and rising investment flows have supported this expansion. Production-linked incentive schemes and improved infrastructure have helped boost output and competitiveness, the report said. India’s trade outlook has improved with new free trade agreements with the European Union and the United Kingdom. These deals are expected to reduce tariffs on more than 95 per cent of traded goods and expand market access for Indian firms.
The World Bank said such reforms are likely to result in “broad-based consumption and real income gains” for households, especially through lower prices for manufactured goods.
