OECD raises India’s growth outlook

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The Organisation for Economic Cooperation and Development (OECD) predictions on Indian Economy :

India’s GDP growth by 40 bps to 6.7 per cent in 2025 from its earlier projection of 6.3 per cent in June, driven by strong domestic demand and robust GST reforms.

Higher tariff rates will weigh on the export sector, but overall activity is anticipated to be supported by monetary and fiscal policy easing, including the reform to the Goods and Services Tax, with growth projected to be 6.7% in 2025 and 6.2% in 2026.

Food price inflation has declined sharply in India, helped by strong domestic supply and export restrictions.

India’s gross domestic product (GDP) surged to a five-quarter high of 7.8% in April-June period.

OECD’s 2025 global growth forecast:

Global economic growth is now expected to slow only slightly — to 3.2% in 2025 from 3.3% last year — compared to the 2.9% the OECD had forecast in June.

Monetary policy easing and strong public investment are expected to support the Indonesian economy, with annual growth of 4.9% projected for both 2025 and 2026.

The OECD forecast U.S. economic growth would slow to 1.8% in 2025 — up from the 1.6% it forecast in June — from 2.8% last year before easing to 1.5% in 2026, unchanged from the previous forecast.

China’s economy is expected to grow 4.9% this year – up from 4.7% in June – before slowing to 4.4% in 2026 – revised up from 4.3%.

In the euro zone, trade and geopolitical tensions were seen offsetting the boost from lower interest rates.

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The Organisation for Economic Cooperation and Development (OECD)

Founded in 1961, the Organisation for Economic Co-operation and Development (OECD) is an intergovernmental economic organization with 38 member countries, founded to promote policies that improve the economic and social well-being of people around the world. the Headquarter of the organisation is located in Paris, France. India is not a member but a key partner. The OECD is a grouping of mostly developed economies that promotes free-market policies, democratic governance, and economic cooperation. The OECD, in collaboration with the G20, spearheaded the proposal for a 15% global minimum corporate tax to curb tax base erosion by multinational corporations.

Objectives

Promote economic growth and financial stability

Encourage free-market economy and democratic governance

Coordinate policies on education, environment, taxation, digital economy, etc.

Collect and analyze data to inform policy decisions.

Functions

Publishes reports and statistics (like OECD Economic Outlook, PISA, Global Tax Report)

Acts as a policy forum and think tank

Sets global standards on taxation (e.g. BEPS project — Base Erosion and Profit Shifting)

Works with G20, IMF, World Bank, and UN.

India and OECD

India is a “Key Partner” country (along with Brazil, China, Indonesia, South Africa)

Collaborates on taxation, corporate governance, and education

Participates in OECD committees and frameworks (like Inclusive Framework on BEPS).