India’s economy is poised to grow by 7% in 2025, according to the latest Global Macro Outlook released by ratings agency Moody’s on Thursday. The agency added that the 50% tariffs imposed by the United States are unlikely to significantly affect India’s overall trade performance.
Moody’s noted that despite the steep duties, Indian exporters have “successfully redirected shipments,” enabling total exports to rise 6.75% in September, even as exports to the US declined 11.9%. Washington’s tariff measures include a 25% duty introduced in August after trade talks stalled, followed by another 25% punitive levy over India’s continued purchase of Russian oil.
The report projects that robust consumption demand and sustained infrastructure investment will continue to drive economic momentum, even as private sector capital expenditure remains cautious.
The Reserve Bank of India (RBI) has estimated GDP growth at 6.8% for FY 2025–26, while the Finance Ministry expects expansion in the 6.3%–6.8% range. Official data shows the economy grew 7.4% in the January–March quarter, accelerating to 7.8% in April–June.
Moody’s forecasts India’s GDP to grow 6.4% in 2026 and 6.5% in 2027, supported by easing monetary conditions and softening inflation. The RBI has cut its key policy rate three times in 2025, including a significant 50-basis-point reduction in June.
India’s retail inflation dropped to a record low of 0.25% in October, down from 1.44% in September, according to government data. The report also highlights the recent GST rate cuts, aimed at boosting consumer spending ahead of the festive season, as an additional factor supporting economic stability.
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