Moody’s highlighted that despite the rupee hitting record lows against the US dollar, most rated Indian companies have managed currency risks effectively through hedging and robust financial buffers. Investment-grade firms also continue to access overseas capital markets without difficulty.

“India will lead growth among emerging markets and across the region,” the agency said, noting that Asia-Pacific GDP is expected to grow 3.6% in 2025 and 3.4% in 2026. Emerging markets in the region will expand at an average 5.6%, far outpacing the 1.3% projected for advanced economies.

Moody’s said India’s expanding economic base, stable corporate performance, and strong investment momentum will keep it ahead of regional peers through 2026.

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Economists attribute the momentum to strong manufacturing activity supported by early festive season demand, GST-driven volume uptick and exporters front-loading shipments to the US ahead of tariff deadlines. However, lower year-on-year government spending may moderate the pace compared to Q1. SBI Research highlights rising investment activity, rural consumption recovery and steady services growth as key contributors. Leading consumption indicators improved significantly in Q2, rising to 83% from 70% in Q1.

The RBI, in its latest report, noted accelerating momentum in October on the back of festive demand and continued benefits of GST reforms. Meanwhile, a Reuters poll pegs Q2 GDP growth at 7.3%, supported by stronger rural spending and government expenditure despite uneven private investment. Analysts believe macroeconomic stability continues to support India’s near-term and medium-term growth outlook.

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