World according to Morgan Stanley report set to designate India as the most attractive consumer market globally
In a significant development, Morgan Stanley has identified India as the fastest-growing major economy through 2026, even amid global economic slowdowns and trade uncertainties triggered by US tariff policies. The report projects India’s real GDP growth at 5.9% in 2025 and accelerating to 6.4% in 2026 [1].
Amid a global growth slowdown—from 3.5% in 2024 to 2.5% in 2025—India stands out due to its robust domestic demand and policy reforms. The country is experiencing a rising credit-to-GDP ratio, a growing share of manufacturing in GDP, and an increasing share of exports, particularly in services [2].
The report attributes this resilience to strong domestic fundamentals, ongoing reform momentum, and supportive macroeconomic conditions. Uniform improvement in high-frequency indicators, a dovish stance from the Reserve Bank of India, and sustained retail participation in the stock market suggest a shift in household balance sheets towards equities [3].
Moreover, the soft patch in corporate earnings growth, which began in the second quarter of FY2025, appears to be ending. New capital expenditure announcements and the conclusion of a trade deal with the United States are identified as potential catalysts for sentiment strengthening further [2].
Stronger trade ties with China and the falling oil intensity in GDP are also expected to boost India's economic growth [2]. Lower inflation volatility is expected due to supply-side improvements and flexible inflation targeting [3].
Morgan Stanley’s analysis provides investors with confidence that despite potential global GDP dips and tariff-related disruptions, India’s growth trajectory remains solid and less vulnerable [1][3]. This further enhances India’s attractiveness for international investors looking for growth outside constrained western markets.
The report serves to forecast strong GDP growth for India despite global headwinds and US tariffs, reinforce India's image as a reform-driven, investment-friendly economy, contrast India’s growth resilience against the backdrop of slowing global economies, particularly the US and China, and provide an authoritative basis for global investors to consider India as a key growth market amid heightened geopolitical trade risks [1][3].
This outlook complements other institutions’ forecasts, such as the IMF raising India’s GDP outlook to 7% for 2024-25, and supports the growing international demand for India-focused investments [2][4]. The economy is becoming more diversified and resilient, positioning India as a top global investment destination.
[1] Morgan Stanley Research, "India: A Top Global Investment Destination," 1st April 2025.
[2] The Economic Times, "Morgan Stanley: India to be Fastest-Growing Major Economy through 2026," 2nd April 2025.
[3] Business Standard, "Morgan Stanley: India's Growth Trajectory Remains Solid Despite Global Headwinds," 5th April 2025.
[4] Bloomberg, "IMF Raises India's GDP Outlook to 7% for 2024-25," 10th April 2025.
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