India

On the demand sidegrowth benefited from a surge in private consumptionsupported by easing inflation and strengthening rural demand. Furthermoreexport growth surged to 6.3 percenta significant increase from 2.2 percent the prior yearprimarily thanks to the strong performance of service exports. Within the services sectorthe export of software and business services was instrumental in this robust expansion.

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

The improvement in urban employment following the pandemic has continued across all demographic groupsincluding malesfemalesand youth aged 15-29. The overall urban unemployment rate has dropped to 4.9 percentmarking its lowest level since the first quarter of FY18-19. For urban menthe unemployment rate stands at 5.8 percentwhile the unemployment rate for urban women decreased to 8.1 percent. Additionallythe urban youth unemployment rate has fallen to 16.1 percent. The urban worker population ratio has also improved for all groupsindicating 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 FY25-26due to heightened global trade policy uncertainty and financial sector volatilitywhich 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-FY27-28assuming 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 creationIndia 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 textilesappareland footwearas well as in electronics and green technology products.
A three-pronged approach—reducing trade costslowering trade barriersand 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 capabilitiesimprove productivityspur economic growthand build long-term economic resilience.

Additionallygovernment initiatives such as rationalizing inverted duty structurescontinuing the implementation of Production-Linked Incentive (PLI) schemesand the announced deregulation drive are expected to positively impact the economy.

*Last Updated: November 102025

The four largest portfolios are  Agriculture (12 operations totaling $1.91 billion in commitments),  Water (10 projects totaling $2.6 billion in commitments),  HealthNutrition & 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 FY25the Bank approved 8 operations amounting to $2.35 billion. Around 12-15 projects are expected to be delivered in FY26with total commitments in the range of $4.0 to $4.5 billion.

The Multilateral Investment Guarantee Agency (MIGA)providing World Bank Group guaranteeshad a gross exposure of $449.5 million in India as of August 2025. In 2024MIGA issued two major guarantees in India. Building upon IBRD’s projectsMIGA guarantees mobilized commercial financing to the Eastern Dedicated Freight Corridorwhich is transforming India’s freight transportation infrastructure with faster and more cost-effective goods movement. AdditionallyMIGA guaranteed international commercial lenders to enable the State Bank of Indiato refinance an existing IBRD loan for rooftop solar systemsaimed 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 financingcomplementing concessional lending provided by other multilateral and development finance institutions. In additionMIGA 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 yearswith more than  280 active projects  spanning infrastructureenergymanufacturinghousingtechnologyand finance. As IFC’s biggest client countryIndia represents over  11 percent  of its global portfolio (with  US$10.3 billion  exposure as of June 302025). Since its first engagement in 1958IFC has invested more than  US$37 billion  (including mobilization) in over 500 Indian companies. India is the sixth largest shareholder in IFCwith 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 marketsmobilizing private capital and innovative financing instruments and platformsand fostering urban and rural development. IFC India programs align with national development priorities. We  support livable cities through municipal financingboost jobs by enabling growth of small and medium enterprisesstrengthen 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 tenorslocal currency financingand 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 yearsIFC has more than quadrupled its investments in India reaching a record $5.4 billion in new commitments in FY25demonstrating 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 jobsissue 340,000 affordable housing loansand approximately 9.89 million micro and MSME loanswith 9.32 million of these loans benefiting women.

In addition to capitalIFC provides non-financial additionality through global expertiseknowledge sharingsupport to strengthen environmental and social standardsand corporate governance.

As one WBGthe IBRD and IFC are jointly working across key sectorssuch as energytransportagricultureinfrastructureempowering underserved communitiesparticularly women. For examplethrough collaboration with the Government of India’s National Rural Livelihoods Missionwe have facilitated access to much-needed financingresulting in over  100,000 loans  totaling  $164.3 million  for small women-owned enterprises. Moving forwardIFC and IBRD will continue to support citiesjob creationenergy transitionand 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 debateprovides analytical underpinnings and learnings for operations and strategyfacilitates the scale up of innovative solutionsand helps to improve state capability. As of August 202532 advisory activities and analytical studies are ongoing. Key areas of focus include poverty and macroeconomic analysisfinancial sector reformenhancing human capital including universal health coverage and genderair quality managementas well as state capability and governance.

*FY25 means Financial Year from July 2024 - June 2025

*Last Updated: November 102025

The CPF emphasizes structural reformsurban transformationand rural prosperity through investments in infrastructurerenewable energyand diversified value chains. It aims to crowd in private capitalstrengthen human capital by upskilling youth and womenand embed climate resilience across sectors. Leveraging innovative financing models and global expertisethe CPF seeks to catalyze transformative impact by aligning with India’s development priorities—jobsease of livingand sustainable growth—while addressing critical challenges like resource efficiencyclimate changeand gender inclusion.

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*Last Updated: January 302026