Moody’s Ratings says India is among the most resilient large emerging market economies and is better positioned than peers to handle future global shocks. In a report on emerging markets, the agency notes that since 2020 India has shown resilience, supported in part by sizable foreign exchange reserves that help limit currency volatility and sustain confidence during periods of external stress.
Moody’s attributes India’s capacity to manage potential shocks to several domestic factors. It says India’s monetary policy framework is clear and predictable, inflation expectations are well anchored, and exchange rates can adjust when needed. The agency also points to “strong and accessible buffers” that would be available if another period of stress occurs.
At the same time, Moody’s highlights constraints that may limit flexibility in responding to consecutive shocks. It says India’s relatively high debt burden and weaker fiscal balance reduce the space available for policy responses. It also emphasizes that while reliance on domestic funding is balanced by deep local markets and reserves, fiscal considerations remain a key vulnerability.
