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NITI Aayog member and renowned economist Arvind Virmani said on Saturday that he has revised his GDP growth projection for India downward for FY'25 due to rising global uncertainties and risks, particularly from the United States and China.

Virmani, who had earlier forecast GDP growth in the range of 6.5-7.5 per cent, has now adjusted the projection to 6.5-7 per cent, with a high probability of it being below 7 per cent, amidst heightened risk aversion caused by global political and economic challenges.

"My focus at the beginning of the year was 7 per cent, plus or minus 0.5 per cent, meaning 6.5-7.5 per cent. However, I am now revising this to 6.5-7 per cent. The political uncertainties arising from the US elections are much greater than I had anticipated," Virmani said.

He added, "The uncertainty surrounding the US elections has a domino effect, influencing Europe, China, and other regions, which indirectly impacts India," speaking on the sidelines of an interactive session with MCCI.

Virmani pointed out the significant slowdown in China's economy, noting its "irrational" approach to capacity building despite lower capacity utilisation.

"China's overcapacity, coupled with its slowing economy, has intensified global uncertainty and risk aversion, which could further affect India's growth trajectory," he remarked.

Despite these challenges, Virmani remains optimistic about India’s long-term prospects.

"If India maintains a 6 per cent growth rate for the next 25 years, it is well-positioned to become an upper-middle-income or even a high-income country, coming close to China," he stated.

Addressing the uneven distribution of investments across various states, Virmani said the NITI Aayog is working on benchmarks and indices to assist states in improving their investment climates, including Foreign Direct Investment (FDI) inflows.

"At present, only a few states attract the majority of investments. The Modi government recognises the pivotal role of states and aims to provide actionable insights to help others catch up," he said.

International institutions estimate India’s GDP growth at 6.4-6.5 per cent.