India’s GDP to grow at 7% in 2025, says Moody’s; country to lead growth among emerging markets

Credit rating agency Moody’s said in a report that India’s Gross Domestic Product (GDP) is expected to grow by 7% in 2025, while the country’s economic performance is said to lead to growth in emerging and developed markets including Australia, Malaysia, Vietnam and Indonesia.

Moody’s Ratings’ 2026 outlook for companies in Asia-Pacific excluding Greater China (APAC) states that India will lead growth among emerging markets and across the region, with GDP growing 7.0% in 2025 and 6.4% in 2026. The country’s domestic growth drivers support its economic resilience amid global uncertainty.

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GDP growth in Asia Pacific will remain steady at 3.4% in 2026, compared to 3.3% in 2024, Moody’s said. A growth of 3.6% is predicted in 2025. On a weighted average basis, emerging markets will drive GDP growth in the region; It will achieve average growth of 5.6% compared to average growth of 1.3% in developed markets.

As the Indian Rupee has weakened against the dollar in the last few months, most of the country’s rating agencies have active currency risk management or strong fiscal buffers, while investable entities have demonstrated access to international capital markets. Meanwhile, several rated companies in the oil and gas, airline, telecom and ride-hailing sectors face dollar risk due to currency mismatches between rupee-denominated revenues and dollar-denominated input costs or borrowings.

On the 50% tariff imposed by the US, Moody’s said the impact of the tariffs would be passed on to companies mainly through three risk transfer channels: trade, weakening macroeconomic conditions and financial markets. The geopolitical landscape has become more dynamic than ever as US-China tensions continue to impact geopolitical risks in the APAC region. Polarization threatens to disrupt semiconductor supply chains and deepen regional divisions, Moody’s said, with a ‘stable’ outlook for the region. However, increasing geopolitical tensions or a sharper slowdown in China could weaken regional growth and credit conditions, which could turn the outlook negative. Conversely, a broad-based decline in interest rates and stronger earnings growth could turn the outlook positive.