India is once again poised to outpace the global economy, firmly establishing itself as the growth engine of emerging markets and the wider Asia-Pacific (APAC) region. In its latest assessment, Moody’s Ratings projected that India’s Gross Domestic Product (GDP) would expand by 7% in 2025, followed by a robust 6.4% growth in 2026, marking one of the strongest multi-year growth trajectories among major economies worldwide.
This optimistic forecast reflects a powerful and sustained momentum driven largely by domestic economic strengths, structural reforms, strong demand, expanding infrastructure investment, and a resilient corporate sector capable of weathering global uncertainties. Moody’s notes that even in a challenging global environment—marked by geopolitical tensions, supply chain realignments, inflationary pressures, and currency volatility—India’s internal growth engines remain firmly intact.
As the Asia-Pacific region braces for modest overall growth—with APAC expected to average 3.6% in 2025 and 3.4% in 2026—India’s performance stands out, making the country the single largest contributor to emerging market growth within the region.
In this detailed, human-written analysis, we unpack Moody’s projections, explore the underlying drivers of India’s economic resilience, examine the challenges ahead, and understand why India is positioned to lead emerging markets in the coming years.
1. India’s Growth Outlook: A Strong 2025 and a Solid 2026 Ahead
Moody’s Ratings highlights that India’s economy is entering a phase of stable, broad-based, and sustainable growth, fueled by a combination of robust domestic consumption, rising investment levels, and ongoing government initiatives aimed at boosting productivity.
Key projections by Moody’s:
- GDP Growth in 2025: 7%
- GDP Growth in 2026: 6.4%
- APAC regional average in 2025: 3.6%
- APAC regional average in 2026: 3.4%
- Emerging Market average growth in APAC: 5.6%
- Advanced Market growth in APAC: 1.3%
These figures place India far ahead of advanced Asian economies—such as Japan, South Korea, Singapore, and Australia—whose growth trajectories remain subdued.
Moreover, India’s projected growth is also significantly higher than the global average, indicating its rising importance not just regionally but globally.
