According to a United Nations report, India's economy is expected to increase by 6.4% this year and 6.6% in 2027.
The economies of South and South-West Asia rose by 5.4% in 2025 compared to 5.2% in 2024, according to a research released on Monday by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), primarily due to robust growth in India.
According to the paper, "supported by robust consumption, especially from the rural economy along with goods and services tax rate cuts, and export frontloading ahead of the United States' tariffs," India's growth increased slightly to 7.4% in 2025.It stated that once 50% tariffs were imposed in August 2025, shipments to the US fell by 25%, causing economic activity in India to slow down in the second half of 2025. The services industry continued to be a major engine of growth.
According to the research, India's growth rate would be 6.4% in 2026 and 6.6% the following year. The nation's inflation rate is expected to be 4.4% this year and 4.3% in 2027.
According to the report, trade tensions and geopolitical uncertainties caused a fall in FDI inflows to developing Asian and Pacific economies. Despite a 14% increase in worldwide flows, FDI to the region fell by 2% in 2025 after rising by 0.6% in 2024.

"Within the Asia-Pacific region, the countries that attracted the largest share of greenfield FDI in the first three quarters were India, Australia, the Republic of Korea and Kazakhstan with USD 50 billion, USD 30 billion, USD 25 billion and USD 21 billion in announced investments, respectively," it stated.
Additionally, it stated that the impact of precarious domestic job conditions was mitigated by the increasing amount of personal remittances provided by Asian and Pacific workers employed abroad.
Although they face challenges, remittances have helped many households maintain their consumption.About 40% of remittances in the Philippines and India go toward recipient households' necessities, such as medical bills."However, as the world's largest remittance recipient of USD 137 billion in 2024, India could face a sizeable loss as the United States has levied a 1% tax on all remittances since January 2026," it stated.
According to projections from the International Renewable Energy Agency (IRENA), there were approximately 16.6 million green jobs worldwide, with an estimated 0.8 million additional jobs created annually between 2012 and 2024—a 7% yearly growth.
7.3 million of these 16.6 million jobs—or 44%, 8%, and 15% of the total—were in China, 1.3 million were in India, and 2.5 million were in the rest of Asia."Governments can leverage the energy transition to an environmentally sustainable economy to foster new domestic industries and build supportive constituencies," it stated.
It stated that focused industrial policies and public investment can hasten the establishment of beneficiaries including grid developers, storage providers, renewable energy manufacturers, and green industrial clusters.
According to the report, India's production-linked incentive program serves as an example of how macroeconomic policy can promote green industrial development by offering incentives for domestic production of solar photovoltaic, batteries, and green hydrogen. This reduces reliance on imports and creates new industrial beneficiaries who have a stake in maintaining the transition."Targeted industrial strategies are being utilised to speed the energy transition and grow clean technology production throughout developing economies in Asia and the Pacific. China's strategic subsidies for the production of electric vehicle batteries and India's Production Linked Incentive program for high-efficiency solar modules are examples of initiatives, it stated.