- S&P upgraded India’s credit rating to BBB for the first time in nearly two decades.
- The upgrade is based on India’s 8.8% real GDP growth and commitment to fiscal consolidation.
- The agency said the impact of US tariffs on India’s economy would be minimal.
GG News Bureau
New Delhi, 15th Aug: Global ratings agency S&P has upgraded India’s sovereign credit rating for the first time in nearly two decades, raising it from BBB- to BBB with a stable outlook. This upgrade places India among the best-performing economies, effectively invalidating US President Donald Trump’s “India is a dead economy” remark.
S&P praised India for its economic resilience, noting an average of 8.8 percent real GDP growth from FY22 to FY24, the highest in the Asia-Pacific region. The upgrade was also driven by the government’s continued commitment to fiscal consolidation, which aims to reduce the country’s overall debt and boost investor confidence. The Finance Ministry welcomed the decision, stating that it reaffirms India’s strong growth and reforms under Prime Minister Narendra Modi’s leadership.
Responding to concerns about US tariffs, S&P Global Ratings Director YeeFarn Phua said the impact on India would be minimal. He explained that because India’s economy is not heavily trade-oriented and its export exposure to the US is only about 2 percent of GDP, the tariffs would not pose a significant threat to long-term growth.
The rating could climb higher if India’s fiscal deficits narrow meaningfully, falling below 6 percent of GDP. Finance Minister Nirmala Sitharaman, in a recent budget, had indicated that the fiscal deficit would be cut from 4.8 percent in FY25 to 4.4 percent in FY26.
