S&P raises India's rating after 18 yrs

Upgrades by a notch to BBB amid US tariff jitters; FinMin says it's an affirmation of fiscal management

- RUCHIKA CHITRAVANSHI

S&P Global Ratings on Thursday raised India's long-term sovereign credit rating by one notch to BBB from the lowest investment grade of BBB-, with a stable outlook. This is the country's first sovereign upgrade by S&P in 18 years.

S&P cited India's economic resilience, sustained fiscal consolidation, and improved quality of public spending. The move places India in the same rating category as countries like Mexico, Indonesia, and Greece.

The upgrade comes days after US President Donald Trump imposed a 50 per cent tariff on Indian goods and called the country a "dead economy." Analysts said the upgrade is expected to widen India's appeal to global investors.

Noting that India remains among the world's best-performing economies, S&P said: "The upgrade reflects India's buoyant economic growth, against the backdrop of an enhanced monetary policy environment that anchors inflationary expectations."

The Ministry of Finance welcomed the move and said India had prioritised fiscal consolidation while maintaining a strong infrastructure push and an inclusive growth approach. "India will continue its buoyant growth momentum and undertake steps for further reforms to attain the goal of Viksit Bharat by 2047," it added.

The 10-year bond yield declined to 6.38 per cent before settling at 6.40 per cent for the day, the steepest single-day drop in yields in two months. The rupee trimmed some losses after the rating upgrade announcement to close at 87.56 against the dollar.