The World Bank warned Tuesday that U.S. tariffs on Indian exports will slow South Asia’s growth next year, even as India remains the world’s fastest-growing major economy.
Regional growth is projected to ease to 5.8% in 2026 from 6.6% in 2025, largely due to higher U.S. tariffs on Indian goods.
President Donald Trump imposed a 50% duty on about $50 billion worth of Indian exports, hitting sectors such as textiles, jewelry and shrimp.
To offset the impact, Prime Minister Narendra Modi last month cut taxes on consumer goods and cars while maintaining heavy infrastructure spending.
The World Bank raised India’s 2025 growth forecast to 6.5%, but trimmed its 2026 projection to 6.3%, citing the tariff drag and slower global trade.