ECONOMY
Early reforms, strong buffers turn India into the most resilient among emerging markets
- IBJ Bureau
- May 06, 2026
India has emerged as one of the most resilient large emerging markets in weathering multiple global shocks over the past five years, Moody’s Ratings has said.
The rating agency also notes that India is well placed to manage future shocks because monetary policy frameworks are clear and predictable, inflation expectations are well anchored, and exchange rates can adjust when needed.
In its sector in-depth report titled, Sovereigns – Emerging Markets, Moody’s has said that early policy reform and strong buffers support resilience to global shocks.
It has underlined India’s (Baa3 stable) durable resilience, driven by early structural policy reforms and solid external and domestic buffers.
The report assesses how large emerging market sovereigns have handled volatile financial conditions across four major stress episodes since 2020.
“Relatively accommodative external market conditions in the wake of recent shocks helped emerging markets absorb successive external shocks since 2020. Market pressures over this period have been transmitted primarily through yield adjustment rather than through rising sovereign risk premia,” Moody’s has added.
India has demonstrated the strongest and most consistent market resilience among peers, alongside Malaysia and Thailand.
According to the report, India has shown limited widening in hard-currency credit spreads, moderate moves in yield differentials, contained exchange rate depreciation and orderly local currency yield volatility.
This contrasts sharply with higher volatility seen in countries like Turkiye and Argentina, the report notes.
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