Moody’s: India Better Placed To Withstand Future Global Shocks
India has emerged as one of the most resilient large emerging market economies since 2020 and is well positioned to navigate future global disruptions, according to Moody’s Ratings.
In its latest report on emerging markets, the agency highlighted that India’s strong foreign exchange reserves, stable policy framework, and deep domestic capital markets have helped it withstand multiple global stress events over the past five years. It noted that India is “better placed” than many of its peers to absorb future shocks, supported by robust financial buffers and a predictable macroeconomic environment.
Moody’s pointed out that India’s reliance on domestic funding is complemented by well-developed local markets and sizeable reserves. However, it cautioned that the country’s relatively high debt levels and weak fiscal balance could limit its ability to respond to repeated external shocks.
The report emphasised that India’s monetary policy framework remains clear and credible, with well-anchored inflation expectations and flexible exchange rate management, allowing the economy to better manage external volatility. These factors are expected to help maintain investor confidence even during periods of global uncertainty.
The study also noted that several major emerging economies have shown improved resilience in recent years, managing successive global disruptions without a sharp rise in borrowing costs or losing access to capital markets. This reflects stronger policy frameworks and better macroeconomic management across the emerging market landscape.
Moody’s analysis covered countries including Indonesia, Mexico, Malaysia, Thailand, Brazil, South Africa, Nigeria, Turkey, and Argentina, assessing their performance during key global stress episodes such as the COVID-19 pandemic, the global inflation surge and aggressive tightening by the US Federal Reserve in 2022, regional banking turbulence in 2023, and renewed tariff tensions in 2025.
According to the report, relatively supportive external financial conditions following recent shocks have also played a role in helping emerging markets absorb these challenges more effectively.
