Will India Continue to Lead as the Fastest-Growing Major Economy Despite US Tariff Increases?
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Synopsis
India is set to maintain its position as the fastest-growing major economy until 2027, despite challenges posed by US tariff hikes. Moody's report outlines key factors driving this growth, including infrastructure investments and export diversification. Stay informed about the economic trends shaping India's future.
Key Takeaways
- India's growth rate is projected at 6.5% through 2027.
- Strong domestic demand and infrastructure investment are key drivers.
- Indian exporters are adapting to US tariff challenges.
- The RBI's monetary policy supports stable growth.
- Global growth remains steady but uneven across regions.
New Delhi, Nov 13 (NationPress) According to Moody’s latest 'Global Macro Outlook report for 2026-27', India is projected to maintain its status as the fastest-growing economy among the G20 nations, achieving a growth rate of 6.5 per cent through 2027, even in the face of tariff increases from the Trump administration.
The report highlights that India's growth trajectory is bolstered by strong infrastructure investments, robust domestic consumer demand, and a focus on export diversification.
It notes that Indian exporters, confronting 50 per cent US tariffs on select goods, have successfully redirected their exports; overall exports rose by 6.75 per cent in September, despite an 11.9 per cent decline in shipments to the US.
The report commends the Reserve Bank of India's (RBI) monetary policy for maintaining a stable growth trajectory. “In India, the RBI maintained its repo rate in October, reflecting a cautious approach amidst subdued inflation and strong growth,” it states.
Moreover, substantial international capital inflows, driven by positive investor sentiment, have helped mitigate external shocks and sustain liquidity.
However, it also points out that while domestic demand remains the main driver of growth, the private sector has yet to fully regain confidence for extensive business investments.
The report anticipates that global growth will likely remain steady yet subdued, with advanced economies growing modestly while emerging markets generally maintain stronger momentum. It forecasts global growth at approximately 2.5 to 2.6 per cent in both 2026 and 2027, indicating steady but uneven expansion across regions.
Advanced economies are projected to grow around 1.5 per cent, while emerging markets are expected to achieve around 4 per cent growth.
The United States is experiencing slower, yet stable momentum, supported by modest consumer spending and advancements in AI-related investments.
The report adds that fiscal stimulus, a more accommodating monetary policy, and regulatory easing could prolong the US credit cycle into 2026, potentially offsetting tariff and immigration pressures, although risks may increase as the cycle matures.
In Europe, the report notes a slight improvement driven by employment gains, wage stability, and monetary policy easing from the European Central Bank. Investments in infrastructure and green technology, particularly Germany’s focus on defense and public projects, are anticipated to stimulate regional growth.
China’s growth rate is predicted to decline from 5 per cent in 2025 to 4.2 per cent by 2027.
Point of View
I affirm that India's resilience in the face of external pressures highlights its economic strength. While challenges remain, such as the need for increased private sector confidence, the ongoing growth driven by domestic demand and strategic export diversification positions India favorably on the global stage. Our focus remains on supporting policies that ensure sustained growth and stability for the nation.
NationPress
13/11/2025
Frequently Asked Questions
What is the projected growth rate for India through 2027?
India is projected to grow at a rate of 6.5% through 2027, according to Moody's report.
How are Indian exporters responding to US tariff hikes?
Indian exporters have successfully redirected their exports despite facing 50% tariffs on some products, with overall exports increasing by 6.75% in September.
What role does the RBI play in India's economic stability?
The RBI has maintained a steady repo rate, contributing to a stable growth trajectory amidst subdued inflation.
How does global growth impact India's economy?
While global growth is expected to remain steady but subdued, India's strong domestic demand and export strategies help maintain its growth momentum.
What are the expected growth rates for advanced economies and emerging markets?
Advanced economies are projected to grow by about 1.5%, while emerging markets are expected to see growth around 4%.
