India has been acknowledged by Moody’s Ratings as one of the most resilient large emerging market economies in the past five years. Moody’s report highlighted India’s strong foreign exchange reserves, stable policy framework, and deep domestic capital markets as key factors that differentiate it from its peers. The report mentioned that since 2020, emerging markets have faced various challenges, including the COVID-19 pandemic, global inflation surge, US Federal Reserve rate hikes, regional banking turmoil, and tariff pressures.
Moody’s observed that India managed to navigate through these turbulent episodes without a significant increase in funding costs or a loss of access to capital markets, unlike some other countries. The agency also praised India’s clear and consistent monetary policy framework, well-anchored inflation expectations, and flexible exchange rate adjustments, which have maintained investor confidence during external uncertainties. India was noted to have strong and accessible buffers to withstand future global stress, emphasizing the importance of quick policy responses in fast-moving markets.
The report highlighted India’s deep local markets and substantial reserves that help mitigate reliance on domestic funding, although fiscal space remains a limiting factor. Moody’s compared India with a group of economies, including Indonesia, Mexico, Malaysia, Thailand, Brazil, South Africa, Nigeria, and Turkey, each experiencing post-pandemic stress with varying outcomes.
