(MENAFN) India’s economy is anticipated to expand by 7% this year, according to the credit ratings agency Moody’s.

In its Global Macro Outlook report released on Thursday, the agency highlighted that the steep 50% tariffs imposed by Washington on India are unlikely to significantly hinder the country’s economic progress.

“Indian exporters, facing 50% US tariffs on some products, have succeeded in redirecting exports, its overall exports climbed 6.75% in September even as shipments to the US dropped 11.9%,” Moody’s stated in the report.

This suggests that Indian businesses have found alternative markets to compensate for declining shipments to the United States.

The US had introduced a 25% import tariff on India in August after both nations failed to finalize a trade deal.

This was subsequently followed by an extra 25% punitive levy on New Delhi in response to its continued purchases of Russian oil.

The report further projected that domestic consumption demand and investments in infrastructure would continue to stimulate economic expansion.

However, Moody’s also observed that private sector capital expenditures are expected to remain cautious for the time being.

Meanwhile, India’s central bank, the Reserve Bank of India (RBI), has forecasted economic growth for the 2025-26 financial year at 6.8%, while the finance ministry anticipates growth in the range of 6.3% to 6.8%.

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