NEW DELHI– India’s long-term economic growth remains on track despite higher U.S. tariffs, according to S&P Global Ratings, which upgraded the country’s sovereign credit rating for the first time in nearly two decades.
The global ratings agency raised India’s long-term rating to “BBB” with a stable outlook, citing strong domestic demand, the government’s commitment to fiscal consolidation, and a supportive monetary policy that has helped keep inflation in check.
S&P forecast India’s economy to expand at an average rate of 6.8 percent over the next three years, pointing to rising infrastructure investment and improved connectivity as key drivers that could ease structural bottlenecks and support growth.
“Over the last three to four years, India has consistently outperformed regional peers and is among the strongest economies globally,” said YeeFarn Phua, Director at S&P Global Ratings. He added that continued reforms, infrastructure expansion, and fiscal discipline would be essential to sustaining momentum.
Vishrut Rana, S&P’s Asia Pacific economist, noted that India’s relatively low dependence on external trade provides a buffer against the impact of U.S. tariff hikes.
Earlier this month, S&P upgraded India’s unsolicited long-term sovereign rating from “BBB-” to “BBB,” just ahead of the country’s 79th Independence Day, citing resilience in the economy and steady progress on fiscal management. The agency also revised India’s short-term rating to “A-2” and upgraded its transfer and convertibility assessment to “A-.”
The stronger outlook also benefited India’s financial sector, with S&P raising the long-term issuer credit ratings of three major non-banking finance companies—Bajaj Finance, Tata Capital, and L&T Finance—along with seven banks including State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Union Bank of India, Indian Bank, and Kotak Mahindra Bank.
S&P said India’s stable policy environment, continued infrastructure investment, and prudent fiscal and monetary measures will underpin its rating for the next two years, even as the government works to reduce debt levels and manage borrowing costs. (Source: IANS)
