Infra spending, consumption to drive India’s 6.5% GDP growth till 2027: Moody’s

Indian economy to grow 6.5 percent until 2027

India’s economy will remain one of the fastest-growing globally, with robust infrastructure spending and resilient household consumption helping sustain average annual economic growth of 6.5 percent through 2027, Moody’s Ratings said in its latest Global Macro Outlook.

The agency kept India’s 2025 GDP growth projection unchanged at 7 percent, followed by 6.4 percent in 2026 and 6.5 percent in 2027, citing stable domestic demand and ongoing export diversification. “We expect Brazil and India — the fastest-growing G20 economies — will grow at 2% and 6.5%, respectively, through 2027, supported by domestic and export diversification,” Moody’s noted.

While infrastructure investments and steady consumption remain the key drivers, Moody’s highlighted that private sector capital spending continues to lag, with corporates cautious about large expansions despite strong macro indicators. “India’s economic growth is supported by robust infrastructure spending and solid consumption, although the private sector remains cautious about business capital spending,” the report said.

The report also pointed to India’s success in redirecting exports amid heightened trade frictions. Facing 50 percent US tariffs on some goods, Indian exporters managed to grow overall shipments by 6.75 percent in September, even as exports to the US fell by nearly 12 percent, it said.

On the inflation front, the ratings agency forecast 2.8 percent growth in 2025, followed by 3.5 percent next year and 4 percent in 2027. India’s inflation declined to a record low of 0.25 percent in October on the back of easing food prices and GST cuts.

Globally, Moody’s forecasts G20 growth of 2.5–2.6 percent in 2026–27, with emerging markets expanding around 4 percent on average, far outpacing advanced economies, which are expected to grow around 1.5 percent.

The ratings firm, however, cautioned that global trade realignments and geopolitical tensions could pose risks to growth momentum.

"Geopolitical tensions, trade disruptions and political instability are amplifying uncertainty. Diverging monetary policies and fragile bond markets, prone to bouts of intense volatility, may exacerbate financial turbulence. Rapid technological advances offer productivity gains and transformative impacts across industries even as they render certain sectors and occupations obsolete," Moody's said.