The ratings agency says US tariffs are unlikely to dim the South Asian nation’s prospects
India’s economy is expected to grow 7% this year, the ratings agency Moody’s has said.
In the Global Macro Outlook report it released on Thursday, the agency said the steep 50% tariffs Washington has imposed on India would not have a major impact.
“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%,” Moody’s said in the report.
The US imposed a 25% import tariff on India in August after the countries failed to reach a trade agreement. This was followed by an additional 25% punitive levy on New Delhi for its continued imports of Russian oil.
Moody’s projected consumption demand and infrastructure spending would boost economic growth.
It also noted that private sector capital spending is likely to remain cautious.
India’s central bank, the Reserve Bank of India (RBI), has estimated economic growth for the 2025-26 financial year at 6.8%, while the country’s finance ministry has projected 6.3%-6.8% growth.
Official data put economic growth in the January-March quarter at 7.4%. It increased to 7.8% in the April-June quarter.
Moody’s has also projected that the Indian economy will grow 6.4% in 2026 and 6.5% in 2027.
In September, India announced it was cutting the Goods and Services Tax (GST) in order to boost spending ahead of the festive season.
The rating agency said an easing monetary policy stance and low inflation have supported economic growth.
RBI slashed its key policy rate thrice in 2025, including a 50 basis point cut in June.
India’s retail inflation hit a record low of 0.25% in October, from a revised 1.44% in September, according to government data.
