World Bank Sees India's Growth Staying Strong Despite Global Headwinds

Amid evolving geopolitical tensions, capital flight, and inflation risks, the World Bank remains sanguine about India’s economic growth prospects. Paul Procee, Operations Manager and Acting Country Director for India at the World Bank, said India is expected to maintain robust growth momentum.

Speaking on the sidelines of the SAPLING High-Level Policy Dialogue, Procee said India’s growth remains supported by investments in people, businesses, and expanding international partnerships, ANI reported.

"India has a very strong baseline growth and basically has a huge economy. And as long as we focus on what we are doing here, which is basically focusing on building businesses, India is creating very nice partnerships and trade agreements with bilateral partners," Procee said.

"So India is really taking care of itself by investing in its people, investing in its businesses, and with that it will continue having a very strong growth base for the coming years."

Speaking about India as an investment destination, he said the country's strength lies in creating a favourable business environment and supporting private-sector growth.

Coordinated Efforts to Sustain Growth Momentum

The Reserve Bank of India held the benchmark repo rate steady at 5.25%, providing the policy stability that markets and investors needed. Meanwhile, the Centre exempted foreign portfolio investors from capital gains tax on investments in government securities.

Earlier, FPIs were required to pay a 12.5% tax on securities held for more than 12 months and a 20% withholding tax on interest income.

The RBI also announced a US dollar-rupee swap facility for FCNR(B) deposits, which is expected to attract dollar inflows and help stabilise the rupee, which has fallen more than 6% so far in 2026.

The coordinated measures by the Centre and the central bank form part of a broader effort to attract foreign capital amid escalating tensions in West Asia and elevated global energy prices.

At its June Monetary Policy Committee meeting, the RBI projected inflation at 5.1%, while warning of upside risks arising from supply-chain disruptions, uncertainty surrounding the Iran-US conflict, and elevated crude oil prices. Growth projections were also revised downward to 6.6% from 6.9% forecast earlier.

Market participants now expect the central bank to consider raising interest rates by the end of the year amid emerging inflationary pressures.

Procee added that India’s large consumer base and expanding network of trade agreements offer significant opportunities for investors.

"There's a lot of potential with consumers in India. So India has everything. And as I said before, there are a lot of free trade agreements coming up and bilateral agreements where India can benefit significantly and continue to grow strongly," Procee said.