India's economy is expected to grow 6.9 per cent in the current fiscal year, the World Bank said on Tuesday, adding that it is well-positioned to tackle global headwinds.

Asia fourth-largest economy expanded 6.3 per cent in the July-September quarter, and gross domestic product growth for the full fiscal year is likely to be 6.8-7 per cent, the government said last week.

The World Bank raised its forecast for India's growth to 6.9 per cent for the current fiscal year from 6.5 per cent earlier. The Bank trimmed its expectation for next fiscal year to 6.6 per cent from 7 per cent earlier.

India, like its global peers, has been plagued by a rise in commodity prices and tightening monetary policy by central banks worldwide.

However, the World Bank is confident that the global slowdown has a much lower impact on India, compared to other emerging economies.

"We have no concerns about India's debt sustainability at this stage," World Bank economist Dhruv Sharma said, adding that public debt had declined.

The report sees average retail inflation at 7.1 per cent this year and warns that the fall in commodity prices could dampen inflationary pressures.

India's annual retail inflation eased to a three-month low of 6.77 per cent in October, but some economists believe it could take up to two years before the rate eased to 4 per cent — the middle level of the Reserve Bank of India's target.

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