ADB Cuts India’s FY26 Growth Forecast to 6.5% on U.S. Tariff Impact

The Asian Development Bank (ADB) has revised India’s economic growth forecast for FY26 downward to 6.5%, from its earlier estimate of 6.7%. The cut comes in the wake of elevated U.S. tariffs that are expected to hit around 60% of India’s exports to the U.S., dampening growth momentum in the second half of 2025-26 and beyond.

The ADB’s latest Asian Development Outlook (September 2025) report also trimmed India’s growth projection for 2026-27 to 6.5% (from 6.8%).

Impact on Developing Asia

Alongside India, the ADB also lowered its growth outlook for developing Asia.

• 2025 forecast: 4.8% (down from 4.9% in April)
• 2026 forecast: 4.5% (down from 4.7%)

Strong Start, Rising Challenges

While India registered robust growth in the first quarter of FY26, the ADB warned that rising trade barriers such as U.S. tariffs will weigh on export-led sectors in the coming quarters.

The bank emphasized that India’s domestic demand, infrastructure investment, and structural reforms remain strong growth drivers, but global headwinds could slow the pace of expansion.