Moody's raised its forecast for India's real GDP growth in fiscal 2026-27 to 7% from 6%, citing stronger private consumption, infrastructure investment and resilient services activity. India's real GDP grew 8.2% year-on-year in the first six months of calendar 2026, up from 7.3% growth in 2025, the ratings agency said. Moody's retained India's Baa3 long-term issuer rating and stable outlook, balancing the country's large, diversified economy and high growth potential against high government debt, weak debt affordability and low per-capita income. The agency said India had remained resilient to the economic shock from the Middle East conflict and expected it to grow faster than other Group of 20 economies and similarly rated emerging-market sovereigns. A prolonged conflict could keep energy prices elevated and push inflation above Moody's 4.8% forecast for fiscal 2026-27, while higher energy and fertiliser import costs could widen the current account deficit. The government remains committed to reducing the central government fiscal deficit to 4.3% of GDP from 4.4% in the previous year, although increased defence and infrastructure spending could slow fiscal consolidation.