World Bank warns US tariffs on Indian exports to partly slow South Asia growth next year

NEW DELHI: The World Bank said on Tuesday higher tariffs on Indian goods exported to the US would be a drag on South Asia’s economic growth rate in 2026, even as it remains shielded in the current year by government spending.

The World Bank said growth in South Asia was expected to slow sharply to 5.8% in 2026 from its projection of 6.6% for 2025. Its forecast for the region comprises India, Bangladesh, Sri Lanka, Nepal, Bhutan, and the Maldives.

“For 2026, the forecast has been downgraded, as some of these effects unwind and India continues to face higher-than-expected tariffs on goods exports to the United States,” the World Bank said in its report.

The World Bank has raised its forecast for India’s growth in the current fiscal year ending March 2026 to 6.5% from 6.3%, while trimming its projection for the next fiscal year to 6.3% from 6.5% due to tariffs imposed by the United States.