Moody's cuts India growth forecast for 2025 to 6.3%

Global ratings agency Moody's Tuesday lowered India's economic growth forecast for 2025 to 6.3% from its earlier estimate of 6.6%, citing policy shift and trade uncertainty.

Geopolitical risks, including tensions between India and Pakistan, also pose downside risk to the forecast, it noted.

The IMF recently revised India's GDP growth forecast downwards to 6.2% for FY26 from 6.5%. The World Bank cut growth estimate to 6.3% from 6.7%.


In 2026, the Indian economy is likely to grow by 6.5%, according to Moody's Ratings.

"Despite a pause and reduction in some tariffs, policy uncertainty and trade tensions-especially between the US and China-are likely to dampen global trade and investment with consequences across the G-20," said the ratings agency.

On April 2, US President Donald Trump imposed reciprocal tariffs on various countries, including a 26% duty on Indian imports. While a 90-day pause until July 9 was announced, a baseline tariff of 10% remains in effect.

India is negotiating a bilateral trade agreement with the US. Last week, US treasury secretary Scott Bessent indicated that the two countries are "very close" to reaching a trade deal, noting that negotiations with India have been relatively easier.

China's GDP growth is expected to slow to 3.8% in 2025 from 4.5% forecasted earlier by Moody's Ratings, while US economic growth is anticipated to slow to 1% compared to 2% projected in the February outlook.