S&P Global Upgrades India’s Sovereign Credit Rating After 18 Years, FinMin Welcomes The Move
In a significant milestone for India’s economy, global ratings agency S&P Global upgraded the country’s sovereign credit rating to ‘BBB’ from ‘BBB-’, with a 'Stable Outlook'. This marks the first such upgrade since January 2007. The short-term rating has also been revised upward to ‘A-2’ from ‘A-3’.
According to S&P, the decision reflects India’s ongoing fiscal consolidation efforts, strong political commitment to sustainable public finances, and an unwavering focus on infrastructure expansion.
The agency highlighted that robust economic growth is bolstering the country’s credit profile, with sound fundamentals expected to sustain momentum over the next two to three years, reported ANI.
Indian Economy Agile, Active, & Resilient: FinMin
The Ministry of Finance, in a post on X (formerly Twitter), welcomed the announcement, calling it a reaffirmation of India’s “agile, active, and resilient” economy under Prime Minister Narendra Modi’s leadership.
S&P also revised India’s transfer and convertibility assessment to ‘A-’ from ‘BBB+’, citing a better monetary and external environment. The upgrade was driven by strong economic momentum — with real GDP growth averaging 8.8 per cent between FY22 and FY24, the highest in the Asia-Pacific region. The agency expects growth to average 6.8 per cent annually over the next three years.
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Sanjeev Sanyal Welcomes Upgrade, Anticipates More
Sanjeev Sanyal, Member of the Prime Minister’s Economic Advisory Council, called the upgrade “much required” and noted that it helps narrow the gap between ratings assigned by major agencies and his own model’s assessment.
“I am pleased to hear that S&P has upgraded India’s sovereign rating to BBB from BBB-. This was much required because, as I have said before, the difference between what the ratings were being given by the three big rating agencies and my own model suggested was a gap of two notches,” Sanyal said.
He added that India’s strong economic performance should prompt similar outlook revisions from other agencies. “By doing this, at least the gap has been reduced somewhat, but I would argue that given India’s economic performance, we should expect a similar upgrade by the other two agencies, as well as over the next two to three years, a further upgrade, because as I said, even after this upgrade, India is probably underrated by one notch,” he remarked.
Despite fiscal deficits, growth is helping to moderate the debt-to-GDP ratio. Domestic consumption — accounting for around 60 per cent of GDP — remains a key shield against global volatility, including US tariffs and shifts in energy import sources.
S&P noted that India’s fiscal position, traditionally a weak spot, is improving. The general government deficit is projected to decline from 7.3 per cent of GDP in FY26 to 6.6 per cent by FY29. A major contributor to this progress is the reallocation of spending towards capital expenditure, which is set to reach Rs 11.2 trillion (3.1 per cent of GDP) in FY26, compared with 2 per cent a decade ago. Including state spending, public infrastructure investment stands at about 5.5 per cent of GDP — matching or surpassing peers.
S&P concluded that India’s rating is anchored by a dynamic economy, robust external balance sheet, and democratic institutions that ensure stability and predictability in policymaking.
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