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The World Bank has raised India's GDP growth forecast for FY2025-26 to 6.5% (up from 6.3%), cementing India's position as the world's fastest-growing major economy. This momentum is supported by strong domestic consumption, particularly a rebound in rural demand, and continued strength in the services sector. However, the bank issued a cautionary note, lowering the growth forecast for FY2026-27 to 6.3%. This downgrade is primarily attributed to the imposition of steep 50% tariffs by the U.S. on a significant portion of India's goods exports. The report recommends policy measures to simplify regulations and facilitate worker reallocation to productive sectors to boost investment and job creation.