India projected to remain the fastest-growing large economy at 7.3% in 2026, says UNCTAD
Asia is expected to remain a central engine of global expansion in 2026, with India's strong projected growth providing a notable source of resilience in an increasingly uncertain global economy
By R Anil Kumar
Geneva, Switzerland/Bengaluru, Oct 9, 2026. India is projected to remain the world’s fastest-growing large economy in 2026, with an estimated growth rate of 7.3%, even as global economic expansion and international trade lose momentum, according to the United Nations Conference on Trade and Development (UNCTAD).
In its Trade and Development Report 2026, UNCTAD highlighted Asia’s growing importance as a driver of global economic growth, while warning that geopolitical tensions, energy shocks and uneven access to development finance could weigh on the outlook.
The global economy is projected to grow by 2.6% in 2026, down from 2.9% in 2025. Growth across developing economies is also expected to moderate to 4%, compared with 4.7% last year, reflecting mounting external pressures and persistent economic disparities.
Asia to Drive 59% of Global Growth
Asia is expected to account for 59% of global economic growth in 2026, with India, Indonesia and China among the region’s major contributors. India is projected to expand by 7.3%, followed by Indonesia at 5.2% and China at 4.5%.
India’s growth outlook is supported by robust domestic demand, expanding manufacturing capacity and sustained public investment in infrastructure. These factors are expected to help the country maintain momentum despite an uncertain international economic environment.
However, UNCTAD cautioned that the resilience of a few leading Asian economies does not reflect the broader experience of developing countries. Many developing economies have fallen further behind since the mid-2010s, highlighting the uneven distribution of global growth.
Global Trade Faces Mounting Pressures
Global trade reached a record $35 trillion in 2025 despite armed conflicts and rising trade restrictions. However, growth in trade in goods and services is expected to slow to around 4% in 2026 from 4.4% in the previous year.
The outlook faces pressure from energy market disruptions, geopolitical conflicts, tighter financial conditions and supply-chain constraints. Rising energy costs could further increase production and transportation expenses, particularly for economies dependent on imported fuel.
Trade restrictions, export controls and investment screening are also reshaping international commerce. Meanwhile, trade between China and the United States has declined by more than 20% since 2024, reflecting changing global trade relationships.
AI Boom and Development Finance Risks
Artificial intelligence-related products, particularly advanced computing equipment used in data centres, have emerged as important drivers of merchandise trade. However, the benefits of the AI boom remain concentrated among a limited number of economies and suppliers.
UNCTAD also identified risks associated with the energy shock, uncertainty surrounding AI-driven growth and shrinking development finance. These pressures could deepen inequalities between advanced economies and developing countries.
Despite these challenges, Asia is expected to remain a central engine of global expansion in 2026, with India’s strong projected growth providing a notable source of resilience in an increasingly uncertain global economy.
