India to contribute 17 per cent to global GDP growth this year

India is expected to contribute as much as 17 per cent to global real GDP growth in 2026 as it continues to be the world’s fastest-growing major economy, according to the latest data compiled by the IMF.

Among the other countries in the IMF’s top 10 list, the USA is expected to contribute 9.9 per cent to the world’s real GDP growth, followed by Indonesia with 3.8 per cent, Turkiye 2.2 per cent, Saudi Arabia 1.7 per cent, Vietnam 1.6 per cent, while both Nigeria and Brazil are expected to contribute 1.5 per cent each.

Germany, which is ranked at the 10th spot, is expected to contribute 0.9 per cent to the global GDP growth, while the rest of the European countries do not figure on the IMF’s top 10 list.

The International Monetary Fund (IMF) has already raised India’s economic growth projection for 2025 by 0.7 percentage points to 7.3 per cent.

In the World Economic Outlook update, the IMF said the upward revision reflects strong momentum in the fourth quarter of the current financial year ending on March 31, 2026. Meanwhile, the IMF projected 6.4 per cent growth in the next financial year of 2026-2027, adding that despite the expected moderation, India remains a key driver of growth among emerging market and developing economies.

It said global growth is projected to hold steady at 3.3 per cent in 2026, supported by easing trade tensions, accommodative financial conditions and a surge in investment linked to technology, particularly artificial intelligence. The IMF said the inflation in India is expected to go back to near target levels after a marked decline in 2025, driven by subdued food prices, offering additional support to domestic demand. However, the IMF cautioned that AI-driven productivity gains could lead to a pullback in investment and tighter global financial conditions, with spillover effects for emerging economies.

Meanwhile India’s current account deficit (CAD) stood at $13.2 billion, or 1.3 per cent of GDP, in the third quarter (October-December) of the financial year 2025-26, according to the RBI’s preliminary data on the balance of payments released on Monday.

The deficit stood at $11.3 billion, or 1.1 per cent of GDP, in the corresponding quarter of the previous financial year.

The merchandise trade deficit increased to $93.6 billion in Q3FY26 from $79.3 billion a year earlier. Within the current account, goods exports amounted to $111.7 billion, while imports stood at $205.3 billion during the quarter, resulting in a net goods deficit of $93.6 billion, the data showed.

However, there was a robust increase in services exports and remittances sent back home by Indians working overseas during the quarter.

Net services receipts rose to $57.5 billion in Q3FY26 from $51.2 billion in Q3FY25. The RBI stated that services exports increased on a year-on-year basis in major categories such as computer services and other business services.

Personal transfer receipts under the secondary income account, representing remittances by Indians employed overseas, increased to $36.9 billion from $35.1 billion a year earlier.

Net outgo under the primary income account, which mainly reflects investment income payments, declined to $12.2 billion in Q3FY26 from $16.4 billion in the year-ago quarter.

Foreign direct investment (FDI) recorded a net outflow of $3.7 billion in Q3FY26, compared with a net outflow of $2.8 billion in Q3FY25, the data showed.

According to the RBI, foreign portfolio investment (FPI) registered a net outflow of $0.2 billion during the quarter, lower than the net outflow of $11.4 billion in the same period last year. Non-resident deposits recorded a net inflow of $5.1 billion, higher than $3.1 billion a year earlier.

Net inflows under external commercial borrowings (ECBs) amounted to $3.3 billion, compared with $4.4 billion in Q3FY25, the RBI said.

Foreign exchange reserves declined by $24.4 billion on a balance of payments basis in Q3FY26, compared with a depletion of $37.7 billion in the corresponding quarter of the previous year.

For the nine-month period from April to December 2025, the current account deficit moderated to $30.1 billion, or 1.0 per cent of GDP, from $36.6 billion, or 1.3 per cent of GDP, in April-December 2024, the RBI data showed.

Net invisible receipts, comprising services, primary income and secondary income accounts, stood at $221.5 billion during April-December 2025, higher than $191.0 billion a year earlier, the RBI said.

Net FDI inflows increased to $3.0 billion in April-December 2025 from $0.6 billion in the corresponding period of 2024. FPI recorded net outflows of $4.3 billion in April-December 2025, as against net inflows of $9.4 billion a year earlier.

Separately, The Syama Prasad Mookerjee Port, Kolkata (SMPK), achieved a major operational milestone by handling 64.026 million metric tonnes (MMT) of cargo from April 2025 to February 2026, thereby surpassing the total traffic of 63.951 MMT handled during the entire Financial Year 2024-25.

“With one month still remaining in the current financial year, the Port has exceeded last year’s overall cargo throughput, demonstrating sustained growth momentum, enhanced operational efficiency and strong collaboration with stakeholders across the maritime trade ecosystem,” SMPK has said in a statement.

In the last 11 months, SMPK recorded notable growth across both its dock systems. While Kolkata Dock System (KDS) handled 17.033 MMT as against 15.01 MMT handled during the corresponding period of the previous financial year.

Indo-Asian News Service