The US-based rating agency cited strong economic momentum and resilience to energy supply shocks for the upward revision.
Moody's Ratings has increased its growth projection for the Indian economy to 7 per cent for the 2026-27 financial year, up from a previous estimate of 6.5 per cent, according to reports by Times of India, Mint and Business Standard.
In its Global Macro Outlook 2027-28, the agency stated that broad-based economic momentum and the country's ability to withstand energy supply shocks justified the higher forecast. The agency expects India to maintain growth levels near 7 per cent over the medium term due to strong macroeconomic fundamentals, improving investment trends and robust consumption.
The rating agency noted that India managed energy price volatility better than expected by diversifying crude oil and gas supplies. Support from tax cuts and state-backed oil marketing companies also helped protect consumers from immediate price impacts.
However, Moody's flagged several near-term risks, including rising price pressures on household spending. It noted that headline inflation is currently approaching the top of the Reserve Bank of India's (RBI) 2-6 per cent target range.
Other potential risks include a weak southwest monsoon and strengthening El Nino conditions, which could impact rural demand and agricultural output. Additionally, the agency warned that further interest rate hikes by the RBI might slow the recovery of private investment.
Despite these risks, high-frequency indicators such as rising capacity utilisation and industrial credit growth suggest India may be entering a new private capital expenditure cycle.
