India to Remain Fastest-Growing Major Economy Through 2027 Despite US Tariffs: Moody’s

India’s Strong Growth Outlook

India is projected to remain the world’s fastest-growing major economy, with Moody’s forecasting a robust 6.5% growth through 2026 and 2027. The growth momentum comes despite the impact of US tariffs under the Trump administration.

Moody’s highlights that domestic demand, infrastructure investment, and diversified exports are key factors supporting India’s economic resilience. However, private sector capital spending remains cautious, reflecting broader market uncertainty.

Minimal Impact of US Tariffs

The Trump-era 50% tariffs on select Indian products initially posed challenges for exporters. Yet, Indian businesses have effectively diversified their markets, cushioning the economy from major shocks.

• Overall Indian exports rose 6.75% in September 2025

• Shipments to the US dropped 11.9%, but other markets absorbed the gap

Moody’s notes that neutral-to-easy monetary policies and low inflation will continue to support growth. Additionally, international capital inflows from positive investor sentiment have helped stabilize external shocks.

Global Economic Context

Moody’s global outlook predicts:

• Emerging markets will outperform advanced economies

• Global GDP growth projected at 2.5%-2.6% in 2026-27, down from 2.9% in 2024

• US economy shows slower growth with moderate hiring and income gains

• China expected to grow 5% in 2025, declining to 4.2% by 2027, with uneven consumer spending and reduced corporate investment

Shifting Trade Patterns

Global trade is undergoing structural shifts due to US-China tensions, rising tariffs, and supply chain vulnerabilities. Moody’s observes:

• Possible economic decoupling between the US and China

• Increased focus on diversifying supply chains away from China

• Trade restrictions on rare earth minerals may accelerate alternative sourcing

Despite uncertainties, global trade continues, and nations are likely to seek stronger, more reliable trade partnerships.

Moody’s Key Takeaways

1. India will remain the fastest-growing G-20 economy

2. 6.5% growth expected through 2027

3. Exports successfully diversified, mitigating US tariff impact

4. Domestic consumption and infrastructure spending remain strong

5. Global trade volatility drives the need for economic resilience