An employee works inside a textile mill at Bhilwara in India’s Rajasthan state, on July 6, 2025.
Himanshu Sharma | Afp | Getty Images
Credit rating agency S&P Global upgraded India’s long-term unsolicited sovereign credit ratings to “BBB” from “BBB-” on Thursday, citing economic resilience and sustained fiscal consolidation.
The agency had revised the outlook on India’s rating in May last year to positive from stable on robust growth and improved quality of government expenditure.
“The upgrade of India reflects its buoyant economic growth, against the backdrop of an enhanced monetary policy environment that anchors inflationary expectations,” the rating agency said in a statement.
“Together with the government’s commitment to fiscal consolidation and efforts to improve spending quality, we believe these factors have coalesced to benefit credit metrics,” it added.
The Indian rupee strengthened to 87.58 against the dollar from 87.66, while the benchmark 10-year bond yield fell 7 basis points to 6.38% soon after the announcement.
The rating agency also revised its transfer and convertibility assessment to ‘A-‘ from ‘BBB+’, it said.
S&P may lower the country’s ratings if it sees an erosion of political commitment to consolidate public finances, while downward pressure could also come from economic growth slowing materially on a structural basis such that it undermines fiscal sustainability, it said.
Ratings could be further raised if fiscal deficits narrow meaningfully such that the net change in general government debt falls below 6% of GDP on a structural basis, it added.