Moody’s Raises India’s Growth Forecast to 7% From 6.5% for Year Ending March 2027

Mumbai | 12 November 2026

Moody’s Ratings, a global credit rating agency, raised its forecast for India’s economic growth to 7% from 6.5% for the financial year ending March 2027. It made the revision in its Global Macro Outlook 2027-28, released on 11 November. The agency linked the change to growth spread across the economy and India’s resilience to the energy supply shock from the Iran war.

How Did India Handle the Energy Price Shock?

Moody’s said India adjusted to the energy price shock better than it had earlier assumed. The agency pointed to two factors that helped the economy absorb higher energy prices:

• India diversified its sources of crude oil and gas.
• State-backed oil marketing companies and tax cuts shielded consumers from the immediate rise in prices.

Moody’s also noted that India is home to the world’s largest single-site refining complex. India’s large refining capacity has helped limit fuel supply disruptions and supports its role as a major exporter of refined petroleum products.

Is India Entering a New Private Investment Cycle?

Moody’s said frequently released economic data suggest India may be close to a new cycle of private capital expenditure. Capital expenditure is spending by companies on factories, machinery and other long-term assets. The agency cited three signals:

• Strong production and imports of capital goods, which are machines and equipment used to make other goods
• Faster growth in loans to industry
• Rising capacity utilisation, which means factories are using more of their production capacity

These signals follow several years in which companies and banks repaired their balance sheets.

How Fast Is India’s Economy Growing?

India’s gross domestic product (GDP), the total value of goods and services the economy produces, grew 7.8% year-on-year in the April-June quarter. An investment boom and strong manufacturing added to consumer demand that was already solid.

Moody’s said broader economic activity remains solid:

• Manufacturing and services purchasing managers’ indices, which are monthly surveys of business activity, are expanding.
• Goods and Services Tax revenue, vehicle sales and merchandise exports recorded double-digit year-on-year growth.

What Risks Did Moody’s Flag for India’s Growth?

Moody’s listed three risks that could slow India’s growth:

• Rising prices that are spreading across more goods and services, putting pressure on household spending
• A weak southwest monsoon, hurting farm output and demand in rural areas
• Tighter monetary policy, which could delay a recovery in private investment

The Reserve Bank of India raised its policy interest rate in October, its first rate hike in nearly four years.

Outlook

Moody’s expects strong consumption, improving investment and sound economic fundamentals to help India sustain growth near 7% over the medium term. The agency said a sustained private investment boom that significantly boosts manufacturing, jobs and productivity could lift growth above its main forecast.

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