India to Lead Emerging Market Growth with 7% GDP Rise in 2025: Moody’s

Global credit rating agency Moody’s Ratings has projected that India will be the fastest-growing economy among emerging markets and in the Asia-Pacific (APAC) region in 2025, with a robust 7% GDP growth. For 2026, India is expected to maintain strong momentum with a 6.4% growth rate. According to Moody’s report, the Asia-Pacific region as a whole is expected to grow 3.6% in 2025 and slightly moderate to 3.4% in 2026, up from 3.3% in 2024. These figures highlight India’s significantly above-average economic trajectory in the region.

Domestic Demand Fuelling Economic Resilience

Moody’s attributes India’s strong performance to resilient domestic growth drivers, particularly,

• Sustained private consumption
• Strong investment activity
• Government’s infrastructure push
• Expanding manufacturing and services sectors
• This domestic dynamism provides a buffer against global macroeconomic uncertainties, geopolitical tensions, and volatile energy markets.

The report underscores that despite global headwinds, India’s economic fundamentals remain intact, keeping it on track for broad-based, stable growth.

Currency Fluctuations Pose Limited Risk

Even as the Indian rupee continues to weaken against the US dollar, Moody’s notes that most rated Indian companies are well-positioned to manage currency risks. This is because,

• Companies have hedging mechanisms and active forex risk management strategies.
• Investment-grade firms maintain strong financial buffers.
• They have continued access to international capital markets, indicating global investor confidence in India’s corporate sector.

This financial discipline allows India to withstand global capital volatility more effectively than many peer economies.

India’s Strategic Edge Among Emerging Markets

Moody’s outlook positions India as a strategic outlier in a global environment facing stagnation risks. The country’s size, demographic advantage, structural reforms, and increasing integration into global supply chains give it a competitive edge.

This follows other recent economic optimism, including the IMF’s 6.6% growth forecast for FY26, and the NSO’s announcement of 8.2% GDP growth in Q2 FY26, showing that India’s growth story remains resilient and consistent.

Key Takeaways

• Moody’s predicts 7% GDP growth for India in 2025, highest among emerging markets and APAC region.
• India is projected to grow 6.4% in 2026, sustaining strong momentum.
• Growth in Asia-Pacific is forecast at 3.6% in 2025 and 3.4% in 2026.
• India’s domestic demand, consumption, and investments drive resilience.
• Weakening rupee poses limited risk due to effective forex risk management by Indian corporates.
• India’s economic fundamentals remain strong, with continued access to global capital markets.