According to reports from CNBC TV18, Moody's Ratings has identified India as the most resilient large emerging market economy since 2020. The rating agency highlighted that India's sizeable forex reserves have helped check currency volatility and reinforce confidence during global shocks. In a comprehensive report on emerging markets, Moody's emphasized that India is well positioned to manage future shocks due to clear and predictable monetary policy frameworks, well-anchored inflation expectations, and exchange rates that can adjust when needed. The agency specifically noted that India showed some of the strongest market resilience across recent global shocks, with movements in credit spreads being limited and short-lived. As per Moody's, widening in hard currency credit spreads was limited and short-lived, emerging market–US yield differentials' peak moves were moderate and exchange rate depreciation was contained. The latest assessment reinforces India's position as the standout performer among emerging market economies in terms of stability and resilience.
As reported by Moody's, the agency's assessment relies on market-facing indicators that tend to react quickly when stress builds, including sovereign bond spreads, domestic yield movements, and exchange-rate stability. For India, Moody's highlights that movements in credit spreads were limited and short-lived, with controlled currency depreciation and orderly fluctuations in local bond yields. The rating agency notes that India retained uninterrupted access to financial markets even during turbulent phases, contrasting with several peers that saw repeated bouts of market dysfunction rather than brief, contained stress. This resilience is framed as absorbing volatility without losing market access rather than avoiding it entirely. According to Moody's, local currency yield volatility rose during stress episodes but remained orderly and well below that of more fragile peers, suggesting that adjustment occurred primarily through predictable rate and foreign-exchange repricing rather than sustained credit stress. The latest report reinforces India's consistent performance across multiple stress tests since 2020.
According to Moody's assessment, several large emerging market sovereigns have absorbed a series of major global shocks over the past five years without experiencing sharp increases in risk premia or losing market access. This reflects durable improvements in policy frameworks and the buildup of buffers, as well as particularly supportive external conditions. The rating agency groups several countries as relatively more resilient: India, Malaysia, Thailand, Indonesia, and Mexico, which are characterized by limited spikes in borrowing costs, moderate currency movements, and continued access to funding markets. By contrast, it says economies such as Turkey, Argentina and Nigeria experienced repeated market stress, including sharp currency depreciation and persistent widening of credit spreads. Moody's assessed sovereign resilience by focusing on large emerging market countries—India, Indonesia, Mexico, Malaysia, Thailand, Brazil, South Africa, Nigeria, Turkiye, and Argentina—over four stress episodes identified by sustained increases in global risk aversion: the onset of the COVID-19 pandemic in early 2020, the global inflation surge and associated US Federal Reserve tightening cycle in 2022, US regional banking stress in early 2023, and renewed tariff tensions in 2025.
As reported by Moody's, Moody's noted that India's reliance on domestic funding is balanced by deep local markets and sizeable reserves. However, the agency cautioned that India's relatively high debt burden and weak fiscal balance limit the amount of space available to respond to successive shocks. The rating agency emphasized that India had made key policy choices that support stability well before the recent stress period, positioning the country better than other emerging market sovereigns to manage future global shocks. In the same comparison set, Moody's also warns that Thailand's rising debt burden risks reducing resilience over time. According to Moody's, India and South Africa have extended maturities, which have helped to limit rollover risks in the face of global shocks. The agency noted that outcomes vary across countries, with some like India (Baa3 stable) showing the most resilience across a range of market indicators, and others like Türkiye (Ba3 stable) recording the most volatility, reflecting policy, balance sheet and credibility constraints.
Separately, Moody's has linked India's broader stability to domestic demand and a relatively robust financial system. The agency forecasts India's real GDP growth at 6.4% for fiscal 2026–27, calling it the fastest pace among G20 economies in that projection set. In its APAC outlook (excluding Greater China), Moody's projects India's GDP to grow 7.0% in 2025 and 6.4% in 2026, while APAC GDP growth is projected at 3.6% in 2025 and 3.4% in 2026 (vs 3.3% in 2024). On credit, Moody's expects system-wide loan growth to accelerate slightly to 11–13% in FY27, compared with about 10.6% in FY26 year-to-date, alongside strong capital adequacy and stable funding and liquidity. The report further noted that relatively accommodative external market conditions in the wake of recent shocks helped emerging markets absorb successive external shocks since 2020, with market pressures transmitted primarily through yield adjustment rather than rising sovereign risk premia.
