India to Top Emerging Markets with 7% GDP Growth in 2025: Moody’s

India, Nov 28 : India is projected to lead growth among emerging markets and the Asia-Pacific region with a 7 per cent GDP expansion in 2025 and 6.4 per cent in 2026, Moody’s Ratings said on Friday. The report highlights that India’s domestic growth drivers underpin its economic resilience despite global uncertainties.

Moody’s noted that the Asia-Pacific region is expected to maintain an average GDP growth of 3.4 per cent in 2026, following 3.6 per cent in 2025 and 3.3 per cent in 2024. Emerging markets in the region will remain key growth engines with a weighted average growth of 5.6 per cent, compared to just 1.3 per cent in advanced economies.

Despite the Indian rupee weakening against the US dollar, rated companies largely maintain robust currency risk management, strong financial buffers, and access to international capital markets, especially investment-grade entities.

The International Monetary Fund (IMF) has also projected India’s growth at 6.6 per cent for FY 2025–26, citing the stabilising impact of Goods and Services Tax (GST) reforms. The reforms are expected to cushion the economy from external shocks, including the recent 50 per cent US tariff hike on select imports, by broadening the tax base, streamlining compliance, and improving Centre-State coordination.

Moody’s and IMF analyses further emphasise that India’s ambition to transition into an advanced economy relies on continuing structural reforms. Key areas include labour market flexibility, ease of doing business, land acquisition reforms, education and health sector improvements, skilling initiatives to match workforce demands, and financial sector deepening to enhance MSME credit access.

These reforms, coupled with strong domestic demand and fiscal stability, are expected to sustain India’s growth trajectory, positioning it as the fastest-growing major economy among emerging markets in 2025.