India’s economy will shine bright despite US tariff fears, says Moody's

India may not just weather the global trade storm, it may thrive through it. According to a new report by Moody’s Ratings, India is among the best-positioned economies to tackle the fallout from US tariffs and global trade disruptions.

Growth Slows, But Still Tops G-20

Moody’s has trimmed India’s GDP growth forecast for 2025, from 6.7% to 6.3%. But even with this downgrade, India is set to post the highest growth rate among G-20 economies. That’s a testament to the country’s resilience amid a volatile global economic climate.

Domestic Demand as India’s Economic Armor

The report highlights a major strength, India’s limited reliance on global trade. Unlike export-heavy economies, India sells fewer goods overseas and is largely driven by domestic consumption. So, even if global trade slows due to new US tariffs, like the proposed 10% universal tariffs and 30% tariffs on Chinese goods, India’s economy remains relatively insulated.

Infrastructure, Capital Inflows & Rate Cut Hopes

Power, transportation, and digital infrastructure continue to attract massive capital investment. Over the next five to seven years, Moody’s expects this momentum to remain strong, offering a long-term growth engine. With inflation easing, the Reserve Bank of India could be poised to cut rates, potentially unlocking more domestic spending and private sector borrowing.

Geopolitics? Not a Major Risk

On the geopolitical front, Moody’s addressed the recent tensions between India and Pakistan. The agency stated these would have minimal impact on India, as its major economic centers are far from conflict zones and it has negligible trade with Pakistan.

The Bigger Picture

As Moody’s puts it, “India’s large domestic economy and limited exposure to global goods trade put it in a stronger position to absorb external shocks.” In short, while the world braces for disruption, India might just stay steady, and even surge ahead.