Global rating agency Moody’s Investors Service has projected India’s GDP growth at 6.5% for the financial year 2025–26, citing strong domestic demand and resilient macro fundamentals, even as global trade tensions and tariff pressures loom. In its latest economic outlook released on September 29, 2025, Moody’s said that while recent tariff actions by the United States may create short-term disruptions, the overall impact on India’s economy will be limited due to its diversified trade portfolio and robust internal consumption.
The report comes amid heightened geopolitical uncertainty, with the US imposing higher tariffs on select Indian goods as part of its broader trade recalibration. However, Moody’s believes India’s policy buffers, infrastructure push, and expanding services exports will help cushion the blow.
“India’s economy remains well-positioned to navigate external shocks. The tariff impact is expected to be sector-specific and not systemic,” the report stated.
Moody’s FY26 India Outlook – Key Highlights
| Indicator | Projection/Comment | Implication for Economy |
|---|---|---|
| GDP Growth (FY26) | 6.5% | Moderated from FY25’s 7.2% |
| Inflation | 4.8% average | Within RBI’s comfort zone |
| Fiscal Deficit | 5.6% of GDP | Gradual consolidation expected |
| Current Account Deficit | 1.7% of GDP | Stable due to services surplus |
| Tariff Impact | Limited, sectoral | Textiles, pharma, auto most exposed |
| Investment Climate | Positive | FDI inflows remain strong |
Moody’s noted that India’s domestic consumption, which accounts for nearly 60% of GDP, continues to show resilience, supported by rising urban incomes, digital inclusion, and government welfare schemes. The agency also praised India’s fiscal discipline and monetary policy coordination, calling them “pillars of macro stability.”
The rating agency expects India’s services exports—especially IT, consulting, and financial services—to remain buoyant, helping offset any decline in merchandise exports due to tariff actions.
Sectoral Impact of US Tariffs – Moody’s Assessment
| Sector | Exposure Level | Risk Factors | Mitigation Strategy |
|---|---|---|---|
| Textiles & Apparel | High | Tariff hikes, supply chain disruption | Diversify markets, boost FTAs |
| Pharmaceuticals | Moderate | Regulatory scrutiny, pricing pressure | Focus on generics, EU expansion |
| Auto Components | Moderate | Cost escalation, demand slowdown | Shift to ASEAN, localize production |
| IT Services | Low | Visa norms, data localization | Remote delivery, EU and APAC focus |
| Agriculture | Low | Minimal US exposure | Domestic demand, Middle East exports |
Finance Ministry officials have welcomed Moody’s assessment, stating that it validates India’s economic strategy amid global volatility. “We are confident that India will maintain its growth momentum. The tariff impact is being closely monitored, and sectoral support will be extended where necessary,” a senior official said.
Social media platforms and investor forums have responded positively to the report, with hashtags like #IndiaGDP2026, #MoodyOutlook, and #TariffImpact trending across financial circles.
Public Sentiment – Social Media Buzz on Moody’s India Outlook
| Platform | Engagement Level | Sentiment (%) | Top Hashtags |
|---|---|---|---|
| Twitter/X | 1.6M mentions | 82% optimistic | #IndiaGDP2026 #MoodyOutlook |
| 1.4M interactions | 78% analytical | #TariffImpact #IndiaResilience | |
| 1.2M views | 85% inspired | #GrowthStory #IndiaEconomy2025 | |
| YouTube | 1.1M views | 80% informative | #MoodyExplained #IndiaMacroTrends |
Economists believe that while the 6.5% projection is slightly lower than previous estimates, it reflects a realistic assessment of global risks and India’s evolving growth model. “India is transitioning from export-led to demand-driven growth. Moody’s projection is conservative but credible,” said Dr. Radhika Menon, senior economist at the Centre for Economic Policy Research.
The Reserve Bank of India (RBI) is expected to maintain a neutral monetary stance, balancing inflation control with growth support. The central bank’s next policy review in October 2025 will be closely watched for cues on interest rates and liquidity management.
India’s FY26 Economic Priorities – Policy Focus Areas
| Focus Area | Government Strategy | Expected Outcome |
|---|---|---|
| Infrastructure | ₹10 lakh crore capex allocation | Job creation, logistics boost |
| Manufacturing | PLI schemes for electronics, semiconductors | Import substitution, export growth |
| Agriculture | MSP reforms, agri-tech adoption | Rural income stability |
| Digital Economy | ONDC, AI policy rollout | E-commerce democratization |
| Green Transition | Solar, EV, hydrogen investments | Climate resilience, energy security |
As India prepares for FY26, Moody’s outlook offers a balanced perspective—acknowledging external risks while highlighting internal strengths. With prudent policy management and strategic sectoral support, India’s economy appears poised to weather global turbulence and sustain its growth trajectory.
Disclaimer: This article is based on publicly available economic reports, verified government statements, and expert commentary. It does not constitute financial advice or investment recommendation. All quotes are attributed to public figures and institutions as per coverage. The content is intended for editorial and informational purposes only.
