S&P Global Ratings upgraded India’s long-term sovereign credit rating on Thursday, citing the country’s “buoyant economic growth” and commitment to “fiscal consolidation.” The ratings agency raised India’s rating from BBB- to BBB, with a “stable” outlook.
S&P noted that India’s economic expansion, supported by a strong monetary policy environment and efforts to improve fiscal management, had contributed positively to its credit metrics. The agency expressed confidence that the impact of U.S. President Donald Trump’s tariff hike on India’s goods, including an increase from 25% to 50% on Indian exports, would be “manageable.”
Despite recent economic slowdowns, including weak urban demand and muted government spending, S&P believes India’s growth trajectory remains intact. The agency emphasized that India’s domestic consumption-driven economy, with about 60% of growth coming from internal demand, provides resilience against trade-related disruptions.
S&P also pointed out that India’s exposure to tariff-induced impacts was relatively limited, with just 1.2% of GDP affected by U.S. tariffs on Indian exports.
