India’s long-term growth prospects remain strong despite higher US tariffs, according to S&P Global Ratings, which upgraded the country’s sovereign credit rating to “BBB” with a stable outlook — the first such upgrade in 18 years.
The global rating agency cited robust domestic demand, fiscal consolidation, and supportive monetary policy as key factors underpinning the upgrade. It projected India’s economy to grow at an average of 6.8% over the next three years, driven by infrastructure expansion and reforms that address structural bottlenecks.
“Over the last three to four years, India’s economy has been among the best-performing in the world, consistently outpacing its regional peers,” said YeeFarn Phua, Director at S&P Global Ratings. He added that the government’s continued emphasis on infrastructure and fiscal discipline would be vital in sustaining momentum.
Vishrut Rana, Economist for Asia Pacific at S&P, noted that India’s relatively low trade dependence provides a buffer against the impact of recent tariff hikes imposed by the US.
Earlier this month, S&P revised India’s long-term unsolicited sovereign credit rating from “BBB-” to “BBB” ahead of Independence Day, citing economic resilience and progress in fiscal consolidation. The agency said the stable outlook reflects policy continuity and high levels of infrastructure investment, which are expected to drive long-term growth.
The upgrade was accompanied by an improvement in India’s short-term rating from A-3 to A-2, and in the transfer and convertibility assessment from BBB+ to A-. S&P also upgraded the long-term issuer credit ratings of three non-banking financial companies (Bajaj Finance, Tata Capital, and L&T Finance) and seven banks, including State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Union Bank of India, Indian Bank, and Kotak Mahindra Bank.
-IANS