S&P Global upgrades India’s credit rating to BBB after 18 years, FinMin responds — Details inside
&imwidth=600&imheight=450&format=webp&quality=medium "S&P Global upgrades India’s credit rating to BBB after 18 years, FinMin responds — Details inside")
Representational Image. Photograph: (X/@thegeo_sync)
India's sovereign rating was upgraded to BBB from BBB- on Thursday by the S&P Global Ratings agency after a gap of 18 years. This position has now moved India a step closer to the coveted A-level category, signalling stronger creditworthiness to global investors.
S&P Global Ratings agency upgraded India's sovereign rating to BBB from BBB- on Thursday, while keeping the economic outlook as “stable.” The agency said the factors had “coalesced to benefit credit metrics” as the government showed a commitment to improving the state of its finances and the quality of its expenditure. This comes amid United States President Donald Trump's 50 per cent tariffs on Indian goods.
In addition, S&P Global has also updated the short-term rating of India to A-2 from A-3 and also improved the transfer and convertibility assessment from BBB+ to A-. “India remains among the best performing economies in the world. It staged a remarkable comeback from the pandemic with real GDP growth over fiscal 2022 to fiscal 2024 averaging 8.8 per cent, the highest in Asia-Pacific. We expect these growth dynamics to continue in the medium term, with GDP increasing 6.8 per cent annually over the next three years. This has a moderating effect on the ratio of government debt to GDP despite still-wide fiscal deficits,” S&P analysts said in a statement.
Union Finance Ministry hailed PM Modi's leadership
Meanwhile, reacting to the upgrade by the S&P Global Ratings agency, the Union Finance Ministry hailed the leadership of Prime Minister Narendra Modi on the social media platform X (formerly known as Twitter), promising continued growth momentum to achieve ‘Viksit Bharat’ by 2047. It also noted that this upgrade from S&P Global since January 2007 is the first upgrade after a gap of 18 years.
“India has prioritised fiscal consolidation while maintaining its strong infrastructure creation drive and inclusive growth approach, which has led to the upgrade. India will continue its buoyant growth momentum and undertake steps for further reforms to attain the goal of Viksit Bharat by 2047,” the ministry further said on X.
Although still at the lowest rung of the investment-grade scale, S&P’s BBB rating moves India a step closer to the coveted A-level category, signalling stronger creditworthiness to global investors. An improved credit rating enables the government to secure loans at lower interest rates.
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