India will lead growth among emerging markets with 7% GDP expansion in 2025: Moody’s

With a 7 per cent GDP expansion in 2025 and 6.4 per cent in the next year, India will lead growth among emerging markets and across the Asia Pacific region, said Moody’s Ratings on Friday.

Moody’s further stated that India’s domestic growth drivers underpin its economic resilience amid global uncertainty.

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Its projected average GDP growth in APAC (Asia-Pacific) will remain steady at 3.4 per cent in 2026, compared with 3.3 per cent in 2024 and the expected growth of 3.6 per cent in 2025.

On a weighted average basis, emerging markets will drive GDP growth in the region, with average growth of 5.6 per cent, compared to average growth of 1.3 per cent in advanced markets, Moody’s added.

Although the Indian rupee has continued to weaken against the dollar, most rated companies have active currency risk management or strong financial buffers, while investment-grade entities have demonstrated access to international capital markets.

The International Monetary Fund (IMF) also projected India to register a 6.6 per cent growth rate for the fiscal year 2025–26.

The IMF report is about the stabilising impact of Goods and Services Tax (GST) reforms, which are likely to cushion the Indian economy from external shocks, particularly the recent 50 per cent tariff hike imposed by the US on select imports.

The IMF acknowledged that streamlining GST compliance, broadening the tax base, and improving coordination between the Centre and States have strengthened India’s fiscal landscape.

These measures are expected to help the country absorb trade-related setbacks and continue driving growth from within.

Further, the IMF emphasised that India’s aspiration to transition into an advanced economy hinges on continuing its comprehensive structural reform agenda.

These include Labour market flexibility and ease of doing business, land acquisition reforms, education and health sector enhancements, skilling initiatives to match a modern workforce, and financial sector deepening to improve credit access for MSMEs.