Good news for India: Moody’s says India will remain the fastest-growing major economy despite US tariff hikes

New Delhi: India(BHARAT) is expected to remain the fastest-growing economy among the G20 nations with a growth rate of 6.5 per cent through 2027, despite the Doland Trump administration’s tariff hikes, according to Moody’s latest ‘Global Macro Outlook report for 2026-27’.

The report states that the pace of India(BHARAT)’s growth will be supported by robust infrastructure investment, strong domestic consumer demand, and export diversification. “India(BHARAT)n exporters, facing 50 per cent US tariffs on some products, have succeeded in redirecting exports, with overall exports climbed 6.75 per cent in September even as shipments to the US dropped 11.9 per cent,” the report points out. The report praises the RBI’s monetary policy for keeping the country on a stable growth path.

“In India(BHARAT), the RBI held its repo rate steady in October, showing that it is cautious on policy with inflation subdued and growth strong,” the report states. The strong international capital inflows, driven by positive investor sentiment, have helped cushion external shocks and maintain liquidity, the report further states. However, it also observes that while domestic demand remains the primary growth engine, the private sector is yet to fully regain confidence for large-scale business investments.

Global growth will likely remain steady but subdued with advanced economies growing modestly and emerging markets mostly maintaining stronger momentum, the report states. It projects global growth at around 2.5 to 2.6 per cent in 2026 and 2027, reflecting steady but uneven expansion across regions. Advanced economies are expected to grow about 1.5 per cent while emerging markets are likely to post a 4 per cent growth.

The United States is clocking slower but stable momentum, supported by modest consumer spending and AI-related investment and adoption, the report states. The fiscal stimulus, a more accommodative monetary policy, and regulatory easing could extend the US credit cycle into 2026, offsetting tariff and immigration pressures — though risks could rise as the cycle matures, the report added.

In the case of Europe, the report observes a modest improvement driven by employment gains, wage stability, and monetary policy easing by the European Central Bank. Investments in infrastructure and green technology, particularly Germany’s investment in defence and public projects, are expected to spur regional growth. China’s growth rate is expected to slow down from 5 per cent in 2025 to 4.2 per cent by 2027.