ECONOMY
After Mr Trump’s “dead economy” remark, S&P upgrades India rating to BBB
- IBJ Bureau
- Aug 15, 2025
S&P Global has upgraded India’s long-term unsolicited sovereign credit rating to BBB from BBB-, citing strong economic resilience and sustained fiscal consolidation.
The outlook remains stable, marking a significant milestone for Asia’s third-largest economy, as it navigates global uncertainties and trade challenges, the global credit rating agency has added. The upgrade follows days after US President Donald Trump had dismissed India as a “dead economy”.
“The upgrade of India reflects its buoyant economic growth, against the backdrop of an enhanced monetary policy environment that anchors inflationary expectations,” S&P has said in a statement. The agency adds that the government’s commitment to fiscal consolidation and efforts to improve spending quality have strengthened India’s credit metrics.
This move comes more than a year after S&P had revised India’s outlook to positive from stable in May 2024 on the back of robust growth and improved expenditure quality. The rating agency has also revised India’s transfer and convertibility assessment to A- from BBB+.
Markets reacted positively to the announcement. The rupee firmed to 87.58 per dollar from 87.66 earlier in the day, while the benchmark 10-year bond yield dropped by 7 basis points to 6.38 per cent, signalling expectations of improved capital inflows and lower borrowing costs.
The upgrade enhances India’s standing in the investment-grade category and is expected to attract more foreign portfolio inflows, particularly into bonds. Vishal Goenka, a co-founder of IndiaBonds.com, has said: “Government bond market is rallying on this news, as this would encourage more foreign and FPI inflows into the bond markets. A higher credit rating systematically gets more investments into the country as risk-adjusted returns are better. We see India remain in the global spotlight for emerging market asset allocation and bond yields to fall in the short term.”
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