Market Radar India: Resilient exports, falling yields, and a 6.5% outlook

Agile exporters withstand US tariffs while falling bond yields drive investment, securing Moody’s steady growth forecast

November 18, 2025Real Estate

Key Takeaways

Moody’s projects steady 6.5% growth for India through 2027 as agile exporters redirect shipments to defy US tariffs and the government steps in with a USD 5 billion relief package to insulate key sectors.
Advisers forecast a powerful cyclical recovery driven by the end of fiscal tightening and falling bond yields that will lower capital costs to unprecedented levels for Indian entrepreneurs.
Institutional investors have poured over USD 1.2 billion into Mumbai real estate while the premium housing segment continues to expand and defy a broader market contraction by capturing a dominant share of sales.

The Macro View

While the global economic stage remains tumultuous, Moody’s Ratings has anchored India’s trajectory with a steadfast 6.5% growth forecast through 2027.

This projected resilience is particularly notable given the looming shadow of 50% US tariffs on select products; rather than buckling, Indian exporters have successfully redirected shipments, allowing overall exports to climb by 6.75% in September even as shipments to the US dropped significantly.

To further insulate this sector, the government has unveiled a USD 5 billion relief package, offering collateral-free loans and trade finance support to impacted industries such as textiles and engineering.

Beyond external trade, the internal economic engine shows signs of a cyclical recovery driven by the end of a hard fiscal-tightening phase.

Economic advisers suggest that as the cost of both debt and equity declines, Indian entrepreneurs will gain renewed power, potentially driving GDP growth over 7%.

This optimism is mirrored in the broader ambition to overtake Japan as the world’s fourth-largest economy by early 2026, a milestone underpinned by robust infrastructure spending and solid consumption.

However, this growth story is not without caveats, as private sector capital spending remains cautious and the nation must generate employment for a massive working-age population to avoid stagnation.

Trend Spotlight

The Premium Surge and the Workforce Paradox

A dichotomy is emerging in how India’s growth manifests on the ground. In the property market, while overall residential sales contracted by 12%, the premium segment - homes valued above INR 10 million - defied gravity with a 4% expansion.

Nowhere is this capital confidence more visible than in Mumbai, where institutional investments have surged past USD 1.2 billion, returning to pre-pandemic vigour.

A new 'billionaires’ row' is emerging on Worli Sea Face, attracting titans like Uday Kotak and Dilip Shanghvi who are drawn by exclusivity and new infrastructure connectivity.

Yet, this accumulation of wealth contrasts sharply with a structural shift in the labour market that threatens the 'Make in India' dream.

A clash has intensified between manufacturing ambitions and a surging gig economy; while factories in industrial hubs such as Tiruchirappalli struggle to recruit, young workers are flocking to quick-commerce platforms that offer immediate liquidity and perceived freedom.

Despite youth unemployment hovering near 40% by some estimates, desperate attempts by factory owners to improve workplace amenities are often losing out to the flexibility of delivery apps.

With a manufacturing skills gap of up to 20% and a higher education system skewing towards the arts rather than technical skills, bridging this divide is essential if India hopes to compete with China as a global industrial hub.