Moody's affirms India's Baa3 rating and flags Middle East risks
Moody's has decided to stick with India's Baa3 credit rating and a stable outlook as of March 31, 2026.
The agency pointed out that India's bounce-back after the pandemic, thanks to big pushes in infrastructure and digital tech, has been impressive.
Still, they warned that ongoing conflict in the Middle East could throw some new challenges India's way.
India FY27 GDP 6% inflation 4.8%
Moody's now expects India's GDP growth to slow down from 7.3% in FY26 to 6% in FY27, with tensions in the Middle East could disrupt fuel supplies and push up costs.
Inflation is also set to rise, from 2.4% this year to 4.8% by FY27, as a result of these disruptions.
India FY27 deficit 4.3% debt 80%+
India's government finances are improving with a projected deficit of 4.3% of GDP by FY27, but Moody's flagged high national debt (over 80% of GDP) as a concern.
They also noted that India depends heavily on remittances from the Middle East (about 40%), and any trade hiccups could make imports like fertilizers more expensive and widen the current account deficit.