India’s Credit Profile Strengthens As S&P Raises Long-Term Rating To BBB, Forecasts 6.8 Per Cent Annual Growth Over Next Three Years

Ratings agency S&P Global on Thursday (14 August) announced that it has elevated India’s sovereign rating from BBB- to BBB.

"The upgrade of India reflects its buoyant economic growth, against the backdrop of an enhanced monetary policy environment that anchors inflationary expectations. Together with the government's commitment to fiscal consolidation and efforts to improve spending quality, we believe these factors have coalesced to benefit credit metrics," S&P Global said in a statement.

The agency projects India’s economy will expand by 6.8 per cent annually over the next three years.

Alongside the sovereign rating upgrade, India’s short-term rating was raised from A-3 to A-2, while its transfer and convertibility assessment moved up from BBB+ to A-.

"On Aug. 14, 2025, S&P Global Ratings raised its long-term unsolicited sovereign credit ratings on India to 'BBB' from 'BBB-', and its short-term ratings to 'A-2' from 'A-3'. The outlook on the long-term rating is stable," the agency said.

S&P Global's announcement comes a day ahead of the nation’s 79th Independence Day celebrations.

The agency noted that the stable outlook reflects its view that continued policy stability and high infrastructure investment will support India's long-term growth prospects.

"That along with cautious fiscal and monetary policy that moderates the government's elevated debt and interest burden will underpin the rating over the next 24 months," S&P Global added.

In May 2024, S&P had revised its outlook on the Indian economy to positive from its earlier rating of stable, CNBC-TV18 reported.

S&P Global had shifted its outlook on India from stable to positive in May 2024.

"We may raise the ratings if fiscal deficits narrow meaningfully such that the net change in general government debt falls below 6% of GDP on a structural basis," the agency said in its latest statement.

India is prioritising fiscal consolidation, demonstrating the government's political commitment to deliver sustainable public finances, while maintaining its strong infrastructure drive, S&P Global wrote in its note.

The firm also said that India's robust economic expansion is having a constructive effect on India's credit metrics and that it expects sound economic fundamentals to underpin the growth momentum over the next two to three years.

S&P Global also pointed to India’s strong economic expansion as a positive influence on its credit metrics, with sound fundamentals expected to sustain growth over the next two to three years.

"In addition, monetary policy settings have become increasingly conducive to managing inflationary expectations," the S&P global note said.

Also Read: Indian Economy Grows 6.5 Per Cent In FY25; Q4 Growth At 7.4 Per Cent