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India has been upgraded in credit rating by Morningstar DBRS, shifting from 'BBB (low)' to 'BBB' with stable trend. The upgrade indicates India's robust economic fundamentals, powered by structural reforms, infrastructure investment, and fiscal consolidation.
Key Highlights
Credit Rating Upgrade & Economic Strength
Morningstar DBRS upgraded India's Long-Term Foreign and Local Currency Issuer Ratings from BBB (low) to BBB.
Short-Term Foreign and Local Currency Issuer Ratings have also been upgraded to R-2 (high) from R-2 (middle).
Distinguishing Features Behind the Upgrade
India's fiscal stance has been bolstered by structural reforms such as digitalization and infra spending.
High GDP growth has been sustained in India, at 8.2% for FY22–25, backed by stable inflation and a good external balance.
The banking industry continues to remain robust with well-capitalized banks and a record low of non-performing loans at 13 years.
Fiscal Consolidation & Debt Management
India's public debt-to-GDP ratio is 80.2%, though risks to debt sustainability are constrained by long maturity profiles.
The Centre's debt is to be brought down to 50% of GDP by FY31, strengthening fiscal prudence.
Global Trade & External Risks
Escalating trade tensions and U.S. tariffs may affect global growth, but India's low dependence on exports reduces the risk.
The IMF lowered its forecast for global growth to 2.8%, but India's medium-term growth prospects are good.
Future Outlook & Potential Upgrades
Pursuing reform and investment-friendly policies can induce additional credit rating upgrades.
India's strong demographics, high savings, and tech improvements underpin long-term economic resilience.
This credit rating upgrade reflects the resilience of India's economy, confirming its status as an important player in the world's financial markets.
Sources: Tribune India, MSN, The Hindu Business Line, LiveMint
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