India to Lead Global Growth in 2025 with 6.3% GDP: UN Forecast
UN forecasts India’s economy to grow 6.3% in 2025, leading globally amid weak global growth, steady inflation, and resilient domestic demand.
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India is projected to maintain its position as the fastest-growing major economy in 2025, with a growth rate of 6.3 per cent, according to the United Nations' latest World Economic Situation and Prospects (WESP) report. The estimate, revised from an earlier projection of 6.6 per cent, reflects a cautious global outlook shaped by escalating trade disputes and policy uncertainties.
Despite the revised figure, India remains an outlier among major economies, buoyed by consistent consumer demand, government-led capital expenditure, and expanding service exports. The UN highlighted the strength of domestic consumption and public sector investments as primary contributors to India’s economic momentum.
The forecast for 2026 indicates a modest growth rate of 6.4 per cent, maintaining India's lead among G20 nations. Inflation is projected to decline from 4.9 per cent in 2024 to 4.3 per cent in 2025, remaining well within the Reserve Bank of India’s (RBI) target band.
The RBI, having held the policy interest rate steady at 6.5 per cent since February 2023, initiated monetary easing in early 2025 to support growth while managing inflation expectations.
While employment levels have been relatively stable, the report emphasized the need for reforms to address structural issues in the labor market. Low female participation in formal employment remains a significant concern. Enhancing gender inclusivity is seen as critical to unlocking broader productivity gains.
The UN cautioned that India could face external pressures due to evolving trade dynamics, particularly from potential U.S. tariff escalations. Although sectors like pharmaceuticals, electronics, and energy are currently shielded from new duties, the report noted that these exemptions might be temporary. Any change in policy could impact export volumes and input costs.
India's projected growth rate surpasses that of all major global economies. China is expected to expand by 4.6 per cent, while the U.S. may grow by 1.6 per cent. The European Union is forecasted at 1 per cent, and Japan at just 0.7 per cent. Germany is anticipated to see a minor economic contraction of -0.1 per cent.
On a global scale, GDP growth is expected to slow to 2.4 per cent in 2025 from 2.9 per cent in 2024. Several emerging economies, including Brazil, Mexico, and South Africa, are forecasted to witness a decline in economic momentum due to weak investment flows and falling commodity prices.
UN Under-Secretary-General for Economic and Social Affairs Li Junhua warned of the broader impact of protectionist policies, stating that rising trade barriers could particularly affect vulnerable developing nations. He noted that such economies already face hurdles in mobilizing funds for long-term development.
Despite these risks, India is seen as better equipped to handle global volatility due to its strong domestic demand and targeted public spending, especially in infrastructure and clean energy sectors.
Amid global economic deceleration, India’s steady growth path reinforces its role as a central pillar in the global recovery framework. The country's resilient fundamentals continue to differentiate it from other major economies.
