Moody’s Crowns India Most Resilient Large Emerging Economy Since 2020

New Delhi: India has been the most resilient major emerging market economy since 2020 and its large foreign exchange reserves help control currency volatility and bolster confidence during global shocks, global ratings agency Moody’s Ratings said on Tuesday.

In a report on emerging markets, Moody’s said India is well positioned to manage future shocks as monetary policy frameworks are clear and predictable, inflation expectations are well anchored and exchange rates can be adjusted as needed. “India is better positioned among emerging market countries to manage future global shocks,” Moody’s said, adding that the country will also face future periods of stress with strong and accessible buffers.

“India’s dependence on domestic financing is offset by deep domestic markets and large reserves. However, India’s relatively high debt burden and weak fiscal balance limit the space available to respond to cascading shocks. India had made key policy choices that supported stability well before the last period of stress,” Moody’s said.

The rating agency also said many major emerging market countries had absorbed a series of major global shocks over the past five years without a sharp increase in risk premiums or loss of market access. “This reflects particularly supportive external conditions, as well as persistent improvements in policy frameworks and the creation of buffers,” he added.

But Moody’s also focused on major emerging markets such as India, Indonesia, Mexico, Malaysia, Thailand, Brazil, South Africa, Nigeria, Turkey and Argentina during four periods of stress defined by persistent increases in global risk aversion. “These are the beginning of the Covid-19 epidemic in early 2020, the increase in global inflation and the resulting tightening cycle of the US Federal Reserve in 2022, US regional banking stress in early 2023 and renewed tariff tensions in 2025,” the statement said.