United Nations, Apr 21: India’s economy is projected to grow at 6.4 per cent this year and 6.6 per cent in 2027, according to a report released by the United Nations.
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) said in its report, released on Monday, that economies in South and South-West Asia expanded by 5.4% in 2025, compared to 5.2% in 2024, with India playing a key role in driving regional growth.
India’s economy grew by 7.4% in 2025, supported by strong domestic consumption, particularly from the rural economy, along with GST rate cuts and export frontloading ahead of the United States’ tariff measures, the report titled Economic and Social Survey of Asia and the Pacific 2026 stated.
It further noted that economic activity in India slowed in the second half of 2025 as exports to the United States fell by 25% following the imposition of 50% tariffs in August 2025. However, the services sector continued to remain a major driver of growth.
The report projects India to record 6.4% growth in 2026 and 6.6% in 2027. Inflation is expected to remain stable at 4.4% this year and 4.3% in 2027.
ESCAP also highlighted a decline in foreign direct investment (FDI) flows to developing Asia-Pacific economies amid rising trade tensions and geopolitical uncertainty. While global FDI increased by 14% in 2025, inflows to the region fell by 2% after rising 0.6% in 2024.
India remained among the top recipients of greenfield FDI in the region, attracting about USD 50 billion in announced investments, followed by Australia, the Republic of Korea, and Kazakhstan.
The report also pointed to rising remittances across Asia-Pacific economies, which continue to support household consumption but are now facing emerging challenges. India, which received USD 137 billion in remittances in 2024, may see some impact following the United States’ decision to impose a 1% tax on remittances from January 2026.
It further noted that India and the Philippines use nearly 40% of remittance inflows for essential household expenses, including healthcare.
On green employment, the report cited International Renewable Energy Agency (IRENA) estimates showing 16.6 million green jobs globally, with India accounting for about 1.3 million of them.
The report also highlighted India’s Production-Linked Incentive (PLI) scheme as a key example of policy support for green industrial growth, particularly in solar modules, batteries, and green hydrogen, aimed at reducing import dependence and boosting domestic manufacturing. (Agency)
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