New Delhi
Moody’s Ratings has revised India’s GDP growth forecast for 2025, lowering it from 6.5% to 6.3%. The downgrade has been attributed to increasing global policy uncertainty and the rise of trade restrictions worldwide. The agency further flagged growing geopolitical tensions between India and Pakistan as a risk to the economic outlook. In particular, Moody’s cited the terror attack in Pahalgam, Jammu & Kashmir, on April 22, which tragically resulted in the deaths of 26 tourists, as a recent example of escalating regional instability.
Despite the lowered 2025 forecast, Moody’s has maintained its projections for India’s growth at 6.7% for 2024 and 6.5% for 2026. According to its Global Macro Outlook 2025-26 (May Update), the global economy is expected to experience a general slowdown. This deceleration is being driven by rising uncertainty over U.S. fiscal and trade policies, financial market volatility, and increasing trade disputes. Moody’s observed that these global developments are compelling international investors and multinational corporations to reassess their strategies.
Adjustments to business operations and investment decisions are expected to result in higher operational costs and cautious capital deployment. India’s economy, while resilient compared to many others, is not entirely immune to these external challenges. Moody’s emphasized that maintaining policy stability, managing geopolitical risks, and strengthening domestic demand will be crucial for sustaining economic momentum in the medium term.