S&P Upgrades India’s Sovereign Rating to BBB
Credit rating agency S&P Global has upgraded India’s long-term sovereign rating from BBB- to BBB, marking its first rating boost in 18 years. The outlook remains stable.
Why the Upgrade
S&P cited India’s strong economic resilience, sustained fiscal consolidation, and improvements in monetary policy credibility. The agency also highlighted infrastructure progress, policy stability, and enhanced spending quality as major factors contributing to the upgrade.
Additional Rating Improvements
The short-term rating has been upgraded to A-2, and the transfer and convertibility assessment has been raised to A- from BBB+—signalling enhanced external stability and market confidence.
Economic Scope
India’s GDP growth, among the highest in the region, along with low reliance on trade and robust domestic demand, helped buffer the economy amid trade tensions and potential U.S. tariffs of 50%. S&P expects India to maintain growth and improve fiscal metrics further.
Market Response
Following the upgrade, the rupee strengthened slightly, and bond yields edged lower, reflecting renewed investor confidence. Analysts see this move as likely to attract long-term inflows into debt and equity markets.
Outlook & Risks
S&P underscored that any erosion in fiscal discipline or structural slowdown could reverse the rating. However, sustained reductions in fiscal deficits below 6% of GDP may open the path for future upgrades.
