India’s Growth Outlook Strengthens with 7% Projection for 2025

November 13, 2025: Moody’s Ratings has projected that India’s economy will grow by 7% in 2025, driven by strong domestic demand, robust infrastructure development, and resilient export diversification. The agency highlighted that steady government spending and private investment continue to support the country’s growth trajectory. However, Moody’s expects a slight moderation to 6.5% in 2026, citing a neutral to accommodative monetary policy stance and sustained capital inflows as key factors maintaining economic stability over the medium term.

Growth Driven by Strong Domestic Activity

As stated in the Global Macro Outlook, India’s growth trend is supported by continued investment in infrastructure and steady consumption. While private sector capital expenditure remains tentative, the overall direction positions India as the fastest-growing economy in the G-20. Moody’s expects India’s real GDP growth to average 6.5% until 2027. For calendar year 2025, growth is estimated to be 7% up from 6.7% in 2024.

Export Diversification Cushions Trade Pressures

Indian exporters have shown strong adaptability in navigating external challenges, including the 50% tariffs imposed by the US on select products. Although shipments to the US declined by 11.9% in September, India’s total exports rose 6.75%, reflecting successful efforts to tap into new markets and diversify trade partnerships. Additionally, steady international capital inflows and positive investor sentiment have helped cushion the impact of global economic headwinds, reinforcing India’s external resilience.

Global Growth Remains Subdued

Moody’s has indicated that while global activity is expected to be stable, advanced economies will show near-term moderate expansion. However, emerging markets should continue to show relatively strong momentum. The outlook referred to growing decoupling risk between China and the US, given increasing trade restrictions. However, there may be continued deep economic linkages with other major economies. There seem to be large differences in forecasts across G-20 countries.

China’s Growth Set to Moderate Over Time

China’s economy is projected to grow by 5% in 2025, supported by government stimulus measures and robust export activity. However, growth is expected to gradually ease to 4.2% by 2027 as policy support moderates. Globally, real GDP growth is forecast to range between 2.5% and 2.6% in 2026 and 2027, compared to 2.6% in 2025 and 2.9% in 2024. This projection points to a phase of moderate yet steady global expansion, with India standing out as a key outperformer—driven by its strong domestic fundamentals and sustained economic momentum.

Disclaimer: At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations