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India's Growth Drivers

Why the Trajectory Is Sustainable

India's growth outperformance vs large EMs is attributed to structural and cyclical factors that Moody's and other agencies have documented.

Key details

Domestic demand: Private consumption (approximately 57% of GDP) and investment are the primary engines — less vulnerable to global trade shocks than export-led models.
Demographics: India's working-age population will continue to grow through the 2040s — providing labour supply that many ageing EMs (China, Brazil) lack.
Capital investment: Government-led infrastructure capex (PM Gati Shakti, National Infrastructure Pipeline) has crowded in private investment in logistics, manufacturing, and digital infrastructure.
Services exports: IT and business process services generate a structural current account credit; India's services surplus partially offsets merchandise trade deficits.
Structural reforms: GST (unified indirect tax), IBC (insolvency resolution), RERA (real estate), and PLI schemes have improved factor market efficiency and attracted manufacturing FDI.
Growth forecasts 2026–27: IMF ~6.5%, World Bank ~6.5%, ADB ~6.7% — all above the ~4% projected for emerging markets as a group.