India, Oct. 9 -- 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, but as of the end of August, it faces considerably higher tariffs", the report says, clearly suggesting that the higher tariffs would hurt India's export competitiveness and therefore, economic activity. To be sure, the World Bank's forecasts are only one among the many institutional forecasts about India's economic growth. The 2025-26 number released by the Bank is slightly lower than what the Reserve Bank of India expects it to be at 6.8%. What is therefore more important about the Bank's latest prognosis is not the number per se but the fact that the US's tariff escalation vis-a-vis India will actually have a tangible impact on the Indian economy's prospects, and the ability of domestic factors to compensate for the loss will dissipate in the slightly longer term. This underlines the importance of policy focus to undo the damage on the external growth front due to the adverse developments in the Indo-US relationship. It should ideally take the form of a trade detente with the US. The second-best scenario can be opening up or widening other export markets to compensate for the loss in the US markets. Either way, this is an important policy challenge....