Impact on India's economic activity is expected to be less severe than that seen in 2020 due to the focus on "micro-containment zones" to deal with the current wave of Covid infections as opposed to a nationwide lockdown, said Moody's Investors Service.
Besides, India's very low coronavirus death count and "relatively very young population" also help mitigate risks.
"GDP is still likely to grow in the double digits in 2021 given the low level of activity in 2020," said Moody's Investors Service.
"Vaccination will be a key element in managing the second wave as the authorities balance virus management against maintaining economic activity. India began its vaccination drive in mid-January and had administered 100 million doses of the coronavirus vaccine as of April 10, becoming the fastest country to reach that threshold so far."
However, a shortage of vaccines and India's nearly 1.4 billion person population, which includes many people living in rural, more remote locations, could slow the progress of the vaccine rollout, it said.
As of early April, around 7 percent of the population had been inoculated. The vaccination drive was expanded to all citizens aged 45 years and above - about 25 percent of the population as of 2019 - from April 1.
Furthermore, workplace vaccination centres were also launched on April 11, which the government expects to facilitate inoculation among workers while minimising risk.
"India has prioritized domestic vaccine distribution, delaying exports, amid the resurgence in coronavirus infections," it said.
"On April 11, the government also placed a temporary prohibition on the export of Remdesivir, which is used in the treatment of coronavirus patients."
India has been experiencing a second wave of coronavirus infections since March.
Daily new reported cases for the month totaled 1.1 million, jumping from the 0.4 million cases reported in February, which was the lowest since the country's 2.6 million peaks in September 2020 during the first wave.
"The state of Maharashtra, the epicenter of the second surge, accounted for close to 50 percent of the active caseload as of April 12.
"Other states and territories including Uttar Pradesh, Chhattisgarh, Delhi, and Karnataka have also reported a sharp rise in daily cases."
In addition, several states announced curfews and weekend lockdowns as India's daily new cases crossed the 100,000 mark for the first time on April 4.
"On April 5, the state of Maharashtra imposed fresh emergency measures, effectively placing one of the country's most populous states and centers of economic activity back into a partial lockdown, with the closure of nonessential businesses, a curfew and capacity restrictions."