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Informist, Thursday, Nov. 13, 2025

 

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--Moody's: India growth supported by robust infra spend, solid consumption 
--Moody's: India GDP growth to be aided by neutral-to-easy monetary policy 
--Moody's: India exporters succeeded in redirecting exports post US tariff 
--Moody's: India pvt sector remains cautious about business capital spending 
--Moody's: See domestic demand, export diversification aid India growth 
--Moody's sees India CPI inflation at 2.8 25, 3.5 26, 4.0 27 
--Moody's keeps India 2027 GDP growth view unch at 6.5% 
--Moody's keeps India 2026 GDP growth view unch at 6.4% 
--Moody's keeps India 2025 GDP growth view unch at 7.0%

 

NEW DELHI – Notwithstanding external headwinds, the Indian economy will continue to grow at a robust pace till 2027 supported by solid consumption and robust infrastructure spending, although the private sector remains cautious about business capital spending, Moody's Ratings said Thursday. The rating agency kept India's growth forecast for 2025, 2026, and 2027 unchanged at 7.0%, 6.4%, and 6.5%, respectively. 

 

"We expect its (India's) economy to continue to grow around 6.5% in 2026 and 2027, supported by a neutral-to-easy monetary policy stance amid low inflation," Moody's said. "International capital flows because of positive international investor sentiment have buffered external shocks," it said in its Global Macro Outlook released Thursday.

 

India has seen steady GDP growth over the last few fiscals on the back of heavy public spending. According to data from the statistics ministry, India's GDP grew 7.8% in Apr-Jun, which was a surprise on the upside. The Reserve Bank of India has also revised India's GDP growth view upwards by 30 basis points to 6.8% for 2025-26 (Apr-Mar).

 

The RBI's Monetary Policy Committee at its latest meeting in October also decided to leave the policy repo rate unchanged at 5.50% and maintained the 'neutral' stance adopted in June. The RBI has lowered the repo rate by 100 bps so far in 2025, largely supported by benign inflation. Moody's Thursday projected India's headline inflation to average 2.8% in 2025, 3.5% in 2026, and 4.0% in 2027. 

 

The RBI had projected India's inflation to average 2.6% in FY26. Data released Wednesday showed CPI inflation fell to 0.25% in October from 1.44% in September. At 0.25%, the CPI inflation print is the lowest in the current series, which has data since 2014. 

 

Despite a bright growth story and policy support, India's private sector has not yet come forward in a big way. This is despite Finance Minister Nirmala Sitharaman saying at multiple occassions that greenshoots of private investments are visible. Domestic demand augers well for the Indian economy, especially amidst trade and capital formation related uncertainties emanating from US' 50% tariff on India's exports, New Delhi's top export destination. 

 

Citing displeasure over the high trade gap, the US had imposed a 25% reciprocal tariff on India, with an additional 25% punitive tariff for trading with Russia. US' higher tariffs on India resulted in a pricing disadvantage for 30–35% for Indian exports, making them less competitive compared with those from China, Vietnam, Cambodia, the Philippines, and other Southeast and South Asian countries. The US accounts for nearly 20% of India's total exports. 

 

According to Moody's, export diversification will also support India's GDP growth. "Indian exporters, facing 50% US tariffs on some products, have succeeded in redirecting exports — its overall exports climbed 6.75% in September even as shipments to the US dropped 11.9%," it said.  End

 

Reported by Priyasmita Dutta

Edited by Tanima Banerjee

 

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