India, Oct. 8 -- The Indian economy will grow at 6.5% in 2025-26 and 6.3% in 2026-27, the World Bank said in its latest South Asia Development Update released on Tuesday. The latest forecasts are 20 basis points - one basis point is one hundredth of a percentage point - higher and lower than the respective June projections. The upward revision in the 2025-26 forecast has been attributed to domestic conditions, particularly agricultural output, rural wage growth and the recent GST reforms.

The downward revision in the next fiscal year's forecast is on account of the 50% tariffs imposed by the US, which accounts for one-fifth of India's merchandise exports. "India had been expected to face lower US tariffs than its competitors in April, bu...