Even as global economies struggle to maintain momentum, India continues to surge ahead. In its latest Global Macro Outlook 2026-27, credit rating agency Moody’s has delivered strong good news — India is expected to remain the fastest-growing G20 economy over the next two years, clocking an impressive 6.5% annual growth rate.

Even the heavy tariffs imposed by the US under Donald Trump’s administration have failed to derail India’s growth story.

What’s Driving India’s Economic Strength?

According to Moody’s, India’s resilience stems from three key pillars:

1. Massive infrastructure investments driving growth and job creation.

2. Robust domestic demand, supported by a growing middle class.

3. Diversified exports, which have reduced dependence on any single country.

Even after the US imposed tariffs of up to 50% on Indian goods, Indian exporters quickly adapted. While shipments to the US fell by 11.9%, overall exports rose 6.75% in September, proving that India’s trade ecosystem has become far more flexible and globally connected.

RBI’s Role in Sustaining Growth

Moody’s also praised the Reserve Bank of India (RBI) for maintaining a balanced monetary stance. With inflation under control, the central bank kept repo rates unchanged in October, fostering a stable growth environment.

Additionally, foreign capital inflows have stayed strong, reflecting investor confidence in India’s fundamentals. This steady stream of foreign investment has provided liquidity support and cushioned the economy from global shocks.

However, the report also noted a lack of aggressive private sector investment, suggesting that while demand remains strong, businesses are proceeding with caution on new large-scale projects.

Global Growth Outlook: India Leads the Pack

Moody’s projects global GDP growth at 2.5% for 2026-27. Emerging economies like India will continue to expand at around 4%, while advanced economies are expected to grow just 1.5%.

• United States: Moderate but steady growth driven by AI investments and consumer spending.

• Europe: Modest recovery led by defense and green-tech investments, especially in Germany.

• China: Expected to grow 5% in 2025, slowing to 4.2% by 2027 amid weak domestic demand and falling investment.