India to stay fastest-growing major economy despite US tariff hikes: Moody’s
India is set to stay the fastest‑growing economy in the G‑20, with Moody’s projecting a 6.5 % GDP growth rate through 2027. The forecast comes in spite of the U.S. tariff hikes by the former Trump administration.
Why India’s growth is staying strong
- Infrastructure boom – Heavy investment in roads, rail, and digital networks is pushing the economy forward.
- Solid domestic demand – Indians keep spending on goods and services, keeping the private sector busy.
- Export resilience – Even with 50 % U.S. tariffs on some products, Indian exporters have shifted markets. September exports grew 6.75 %, while U.S. shipments fell 11.9 %.
- RBI’s steady hand – The Reserve Bank of India left its repo rate unchanged in October, keeping inflation low and growth on track.
- Foreign investment – Positive investor sentiment is bringing in strong capital inflows, smoothing out external shocks.
What the report says about the private sector
Domestic demand drives growth, but private firms still lack full confidence to invest heavily in new projects.
Global backdrop
- The world economy is expected to grow 2.5 %–2.6 % in 2026‑27.
- Advanced economies (e.g., the U.S., Europe) will see modest 1.5 % growth.
- Emerging markets will lead the pace with about 4 % growth.
U.S. momentum
The U.S. is moving slowly but steadily, with consumer spending and AI investment providing support. Ongoing fiscal stimulus, an easing monetary policy, and regulatory reforms could extend the country’s credit cycle into 2026, but risks may rise as the cycle matures.
Europe’s patch
Europe shows modest gains thanks to better employment, wage stability, and ECB monetary easing. Infrastructure and green-tech projects, especially in Germany, are expected to lift growth.
China’s slowdown
China’s growth is projected to slow from 5 % in 2025 to 4.2 % by 2027.
In short, India’s 6.5 % growth rate through 2027 positions it well ahead of other G‑20 economies, with steady domestic demand, resilient exports, and supportive monetary policy keeping the engine running.
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