India's Credit Rating Upgraded to 'BBB' by S&P Global Amid Fiscal Discipline and Growth

S&P Global Ratings upgraded India's long-term sovereign credit rating to 'BBB' from 'BBB-', citing strong growth, fiscal discipline, and resilience to global headwinds. The upgrade reflects India's buoyant economic growth and sustained fiscal consolidation. S&P forecast India's real GDP to grow by 6.5% this fiscal, backed by solid consumer and public investment dynamics. The agency expects policy continuity post-elections to support further economic reforms and fiscal consolidation.

India's economic resilience and sustained fiscal consolidation have led S&P Global Ratings to upgrade the country's long-term unsolicited sovereign credit rating to 'BBB' from 'BBB-'. The upgrade, announced on Thursday, reflects India's robust economic growth and commitment to fiscal discipline.

The upgrade comes amidst a backdrop of strong economic performance, with India's real GDP forecast to grow by 6.5% this fiscal year, according to S&P. This growth is driven by solid consumer and public investment dynamics, as well as the country's ability to withstand global headwinds [1].

S&P Global Ratings Director YeeFarn Phua highlighted that India's limited trade exposure to the US, which accounts for only about 2% of GDP, means that the recent US tariffs are unlikely to significantly impact the country's economic growth. The agency maintains a positive outlook on India's sovereign rating, projecting a GDP growth of 6.5% in the ongoing fiscal year [2].

The upgrade also reflects India's buoyant economic growth, which has been bolstered by an enhanced monetary policy environment that anchors inflationary expectations. The government's commitment to fiscal consolidation and efforts to improve spending quality have further benefited credit metrics, leading to the upgrade [3].

The Indian rupee strengthened to 87.58 against the dollar, 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+' [3].

S&P Global Ratings expects policy continuity post-elections to support further economic reforms and fiscal consolidation. The agency may lower the country's ratings if it sees an erosion of political commitment to consolidate public finances [3].

References:
[1] Reuters. (2025, July 2). S&P upgrades India's rating to BBB. [URL](https://www.marketscreener.com/news/s-p-upgrades-india-s-rating-to-bbb-ce7c51d8d088f427)
[2] Times of India. (2025, August 13). India's growth to remain unaffected by Trump's tariffs, says S&P. [URL](https://timesofindia.indiatimes.com/business/india-business/dont-think-us-tariffs-will-sp-confident-donald-trumps-tariffs-wont-impact-indias-growth-heres-why/articleshow/123283782.cms)
[3] News18. (2025, August 13). Trump tariffs to have limited impact on India’s growth, FY26 forecast at 6.5%: S&P. [URL](https://www.news18.com/business/trump-tariffs-to-have-limited-impact-on-indias-growth-fy26-forecast-at-6-5-sp-ws-ekl-9504113.html)