India will continue to be the fastest expanding economy among the mature and emerging G-20 countries, and its massive domestic market makes it less exposed to possible shocks from US trade policies. According to the report, India has a low external vulnerability indicator due to its relatively moderate external debt-to-GDP ratio of 19% and low export dependency on the US market of 2%.
According to Moody’s assessment on emerging markets, India’s GDP growth, predicted at 6.5 percent for 2025-26, will remain the strongest among advanced and emerging G-20 countries as a result of tax cuts and continuing monetary policy easing by the Reserve Bank as inflation has fallen.
The survey predicts that India’s inflation would average 4.5 percent in the current fiscal year, down from 4.9 percent in the previous fiscal year. This is likely to pave the way for a soft money policy, which includes lower interest rates and increased economic liquidity, to stimulate economic growth.
Large, diverse, and domestically driven emerging market economies, such as India and Brazil, are better positioned than smaller counterparts to continue drawing capital and endure cross-border outflows. These two economies also have strong domestic capital markets and low external vulnerability indicators,” Moody’s stated.
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