Economy of India / How will India's growth rate be among developed and emerging G-20 countries?

Economy of India: India's economic growth is estimated to be 6.5 percent this fiscal year, which will make it the country with the highest growth rate among the G-20 countries. This latest estimate was published by Moody's Ratings on Tuesday. According to the rating agency, India will achieve this growth rate due to its tax measures and continued monetary easing. In addition, the Indian economy is in a strong position amid global capital flows, trade, and geopolitical changes, which gives it a unique position compared to emerging and developed countries.

Major reasons for India's economic situation and growth

Moody's said in its report that India has consistently shown the ability to attract capital, while it has also faced the risk of global capital inflows and outflows. It is clear that the Indian economy is one of the emerging markets that has remained stable despite the impact of US policies, changes in the global supply chain and trade tensions. India has taken effective measures to increase savings in its domestic capital markets and abroad, which has helped to deal with global financial pressures.

Moody's also said that India's growth rate is estimated to be 6.5 percent in the next financial year 2025-26, slightly lower than 6.7 percent in 2024-25. Despite this, this estimate will be the highest for G-20 countries. Tax measures and monetary policy easing have mainly had an effect in stimulating India's growth rate. The government has increased the income tax exemption limit to Rs 12 lakh, giving tax relief of Rs 1 lakh crore to the middle class. Additionally, the Reserve Bank of India (RBI) has cut interest rates by 25 basis points, which has further encouraged economic activity.

Counter turmoil with resources

Moody's also mentioned that large emerging markets have sufficient resources to deal with the turmoil in the global economy. Although growth rates may slow down in some countries, the Asia-Pacific region will see the fastest growth. China's growth may also see some moderation, but investment in infrastructure and high-tech sectors and exports will still be key growth drivers.

India and Brazil's unique position

According to Moody's, large, diversified and domestically oriented economies like India and Brazil are more able to attract capital and cope with cross-border outflows. These countries have deep domestic capital markets and ample foreign exchange reserves, which help them cope with global financial volatility. Because of these characteristics, investors believe these countries are able to withstand external financial pressures.