India

On the demand side, growth benefited from a surge in private consumption, supported by easing inflation and strengthening rural demand. Furthermore, export growth surged to 6.3 percent, a significant increase from 2.2 percent the prior year, primarily thanks to the strong performance of service exports. Within the services sector, the export of software and business services was instrumental in this robust expansion.

Average inflation declined to 4.6 percent, from 5.4 percent in FY23-24, opening space for easing monetary policy.

The improvement in urban employment following the pandemic has continued across all demographic groups, including males, females, and youth aged 15-29. The overall urban unemployment rate has dropped to 4.9 percent, marking its lowest level since the first quarter of FY18-19. For urban men, the unemployment rate stands at 5.8 percent, while the unemployment rate for urban women decreased to 8.1 percent. Additionally, the urban youth unemployment rate has fallen to 16.1 percent. The urban worker population ratio has also improved for all groups, indicating that the reduction in unemployment is primarily due to job creation rather than a drop in workforce participation.

Growth is expected to reach 6.3 percent in FY25-26, due to heightened global trade policy uncertainty and financial sector volatility, which are expected to negatively impact domestic investment and global growth. Shifts in trade policy and the anticipated global economic slowdown are also expected to reduce external demand for India’s goods and services.

Growth should gradually converge back to potential over FY26-27-FY27-28, assuming global uncertainties are resolved in an orderly fashion.
Trade will play a critical role in creating jobs and boosting growth.

To support growth and job creation, India will need to continue harnessing its global trade potential and increase demand for India’s exports. The successful completion of free trade agreements (FTAs) with key trading partners could improve market access for Indian goods and services and strengthen both business and consumer confidence. The recently concluded trade agreement on merchandise and services with the United Kingdom signaled India’s willingness to reduce tariffs (matching zero-tariff rates with trade partners), particularly in more labor-intensive sectors such as textiles, apparel, and footwear, as well as in electronics and green technology products.
A three-pronged approach—reducing trade costs, lowering trade barriers, and deepening integration into global value chains—can help India achieve its ambitious goal of $1 trillion in merchandise exports by 2030.
Greater openness to trade will enhance India’s technological capabilities, improve productivity, spur economic growth, and build long-term economic resilience.

Additionally, government initiatives such as rationalizing inverted duty structures, continuing the implementation of Production-Linked Incentive (PLI) schemes, and the announced deregulation drive are expected to positively impact the economy.

*Last Updated: November 10, 2025

The four largest portfolios are  Agriculture (12 operations totaling $1.91 billion in commitments),  Water (10 projects totaling $2.6 billion in commitments),  Health, Nutrition & Population (6 projects totaling $1.67 billion), Education (6 projects totaling $2 billion), Transport (7 projects totaling $1.67 billion) and  Urban (11 projects totaling $2.55 billion respectively). In FY25, the Bank approved 8 operations amounting to $2.35 billion. Around 12-15 projects are expected to be delivered in FY26, with total commitments in the range of $4.0 to $4.5 billion.

The Multilateral Investment Guarantee Agency (MIGA), providing World Bank Group guarantees, had a gross exposure of $449.5 million in India as of August 2025. In 2024, MIGA issued two major guarantees in India. Building upon IBRD’s projects, MIGA guarantees mobilized commercial financing to the Eastern Dedicated Freight Corridor, which is transforming India’s freight transportation infrastructure with faster and more cost-effective goods movement. Additionally, MIGA guaranteed international commercial lenders to enable the State Bank of Indiato refinance an existing IBRD loan for rooftop solar systems, aimed at delivering clean energy and cut greenhouse gas emissions. MIGA has also been working closely with the Ministry of Finance to provide credit enhancement solutions at the state-owned enterprise (SOE) level. This will enable SOEs (and subnational governments) to utilize long-term commercial financing, complementing concessional lending provided by other multilateral and development finance institutions. In addition, MIGA is actively evaluating opportunities to support Indian corporates’ outbound investments.

International Finance Corporation (IFC) has been a key partner in India’s development for over 65 years, with more than  280 active projects  spanning infrastructure, energy, manufacturing, housing, technology, and finance. As IFC’s biggest client country, India represents over  11 percent  of its global portfolio (with  US$10.3 billion  exposure as of June 30, 2025). Since its first engagement in 1958, IFC has invested more than  US$37 billion  (including mobilization) in over 500 Indian companies. India is the sixth largest shareholder in IFC, with a 4.01 percent stake. IFC India's equity exposure stands at  US$3.5 billion,  representing nearly a quarter of global equity investments.

IFC’s strategy in India aims to drive inclusive and sustainable growth by creating new markets, mobilizing private capital and innovative financing instruments and platforms, and fostering urban and rural development. IFC India programs align with national development priorities. We  support livable cities through municipal financing, boost jobs by enabling growth of small and medium enterprises, strengthen energy security by expanding access to affordable and reliable electricity,  and  promote financial inclusion  to help realize the country’s ambition of becoming Viksit Bharat—a $30 trillion economy—by 2047.

IFC offers longer tenors, local currency financing, and focuses on scaling capital access and introducing innovative financing instruments like  India’s first sustainability-linked bond (SLB) in the road sector, first Real Estate Investment Trust (REIT) investment, IFC’s first blue transactionby a financial institution in the country and sustainability-linked loan to boost sustainable tyre productionto address the country’s most pressing challenges.

In the last three years, IFC has more than quadrupled its investments in India reaching a record $5.4 billion in new commitments in FY25, demonstrating the transformative potential of private capital. IFC’s FY25 investment over the life of the project will help create upto 600,000 direct and indirect jobs, issue 340,000 affordable housing loans, and approximately 9.89 million micro and MSME loans, with 9.32 million of these loans benefiting women.

In addition to capital, IFC provides non-financial additionality through global expertise, knowledge sharing, support to strengthen environmental and social standards, and corporate governance.

As one WBG, the IBRD and IFC are jointly working across key sectors, such as energy, transport, agriculture, infrastructure, empowering underserved communities, particularly women. For example, through collaboration with the Government of India’s National Rural Livelihoods Mission, we have facilitated access to much-needed financing, resulting in over  100,000 loans  totaling  $164.3 million  for small women-owned enterprises. Moving forward, IFC and IBRD will continue to support cities, job creation, energy transition, and the mobilization of private capital to foster sustainable growth in India.

The World Bank Group has a wide-ranging program of Advisory Services & Analytics. The program informs policy debate, provides analytical underpinnings and learnings for operations and strategy, facilitates the scale up of innovative solutions, and helps to improve state capability. As of August 2025, 32 advisory activities and analytical studies are ongoing. Key areas of focus include poverty and macroeconomic analysis, financial sector reform, enhancing human capital including universal health coverage and gender, air quality management, as well as state capability and governance.

*FY25 means Financial Year from July 2024 - June 2025

*Last Updated: November 10, 2025

The CPF emphasizes structural reforms, urban transformation, and rural prosperity through investments in infrastructure, renewable energy, and diversified value chains. It aims to crowd in private capital, strengthen human capital by upskilling youth and women, and embed climate resilience across sectors. Leveraging innovative financing models and global expertise, the CPF seeks to catalyze transformative impact by aligning with India’s development priorities—jobs, ease of living, and sustainable growth—while addressing critical challenges like resource efficiency, climate change, and gender inclusion.

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*Last Updated: January 30, 2026