Moody’s Ratings has raised its forecast for India’s real GDP growth in the current fiscal year to 7%, up from its earlier projection of 6%.

The rating agency said the upgrade reflects the resilience of the Indian economy despite global uncertainties and the ongoing conflict in West Asia.

However, Moody’s highlighted several risks that could affect India’s inflation, consumption and economic growth. Elevated energy prices could increase inflationary pressure, while the potential impact of El Niño on food prices remains another concern.

The agency made the revised forecast as part of its periodic review of India’s sovereign credit rating, which remains at ‘Baa3’.

Moody’s also said India’s debt reduction is expected to remain gradual. The country’s debt affordability continues to face pressure because of its relatively high debt burden and elevated interest costs.

The latest forecast suggests that domestic economic resilience could help India maintain strong growth despite external shocks. At the same time, movements in energy prices, food inflation and global economic conditions remain important factors for the growth outlook.

The revised projection places India’s economic performance under close watch as policymakers navigate external risks and inflationary pressures.