(August 23, 2025): S&P Global Ratings, the New York–headquartered credit rating agency that assesses the financial health of countries and corporations, has upgraded India’s sovereign rating for the first time in nearly two decades. It’s a move that signals confidence in the nation’s resilience, fiscal discipline, and growing global stature.
The timing is significant. It comes at a moment of global uncertainty when US President Donald Trump dismissed India as a ‘dead economy,’ imposed a steep 50 per cent tariff on its imports, accused it of being ‘a very big abuser of tariffs,’ and voiced his unhappiness over India’s purchase of Russian crude oil. Against such criticism, the S&P upgrade stands as a powerful counter-narrative: India is now being recognized as one of the best-performing economies in the world.
What the S&P upgrade means for India
S&P Global Ratings is one of the world’s top three credit rating agencies, often referred to as the “Big Three” along with Moody’s and Fitch. Its job is to assess the financial health and creditworthiness of countries and corporations. Ratings are graded like report cards: “AAA” being the safest, while lower grades reflect higher risk. India’s sovereign rating has been upgraded from BBB- to BBB with a stable outlook. The BBB band represents “investment grade” status — a green light that tells global investors that India is a safe and reliable place to invest.
This marks the first such upgrade in nearly two decades, and it carries far-reaching implications: lower borrowing costs, higher foreign investment inflows, and greater confidence in India’s long-term growth story. For the Prime Minister Narendra Modi-led NDA government and industry leaders, the move is a resounding affirmation of India’s economic reforms and resilience.
The American financial services giant placed India “among the best-performing economies,” praising it for averaging 8.8 per cent real GDP growth from FY22 to FY24 — the highest in the Asia-Pacific region. This performance comes despite monetary uncertainty in a post-Covid world and significant geopolitical challenges arising from conflicts in Ukraine and West Asia.
The upgrade from BBB- to BBB with a stable outlook reflects the resilience of India’s economy and its ability to sustain high growth against global headwinds.
Fiscal discipline at the core
“This is the first such upgrade in 18 years, with a ‘stable’ outlook. It signals enhanced macro‑economic stability and fiscal credibility,” Vikram Subburaj, CEO, Giottus, India’s third largest cryptocurrency exchange, tells Global Indian.
Elaborating, he says the upgrade acknowledges India’s sustained fiscal consolidation, improved expenditure quality, and robust monetary policy framework.
“The nation managed to hold inflation securely within the RBI’s two–six per cent band. The rating improvement should translate into lower borrowing costs, heightened foreign investment flows, and stronger confidence in Indian financial assets,” he says.
Vikram Subburaj, CEO, Giottus
The CEO anticipates that these structural developments will fuel further growth in digital asset adoption and deepen financial inclusion. “It should empower India’s diaspora to engage with India’s expanding economy more dynamically and securely,” he says.
The upgrade by the American financial services giant follows a May 2024 revision – to ‘positive’ – driven by robust growth and better quality of government spending. It reflects the government’s continuing commitment to fiscal consolidation – i.e., reduction of the country’s overall debt.
Risks include a weakening of political commitment to fiscal consolidation or a structural slowdown in economic growth that undermines debt sustainability, S&P said.
Investor confidence reinforced
“The upgrade in rating will help attract greater foreign investment and improve the affordability of capital. More importantly, it stands as a validation of India’s prudent economic management and fiscal discipline,” feels Ajaypal Rathore, Director, Finance, Burger Singh, the largest made-in-India burger chain with a unique product and more than 175 thriving outlets across the country.
The Indian economy is demonstrating robust growth. “The S&P rating offers reassurance on India’s “Reform, Perform, and Transform” agenda. The government’s efforts to simplify regulations, ease compliance requirements, and improve the ease of doing business have led to tangible economic progress and increased investor confidence,” says Rathore, in a chat with Global Indian.
Ajaypal Rathore, Director, Finance, Burger Singh
RBI’s role and startup push
Additionally, Rathore mentions that timely Reserve Bank of India (RBI) interventions to maintain adequate liquidity have supported industry players and maintained market stability.
“The proactive support for the startup ecosystem—by enabling forward-looking policies and fostering innovation—further underscores the government’s commitment to sustainable growth.”
Rathore says the S&P rating validates these initiatives and reflects global confidence in India’s economic trajectory. “It bolsters foreign investor confidence: This positive rating signals to foreign investors that India offers attractive investment opportunities.” Supported by S&P’s outlook and analysis, investors can enter the Indian market with assurance.
“Increased foreign investment will provide crucial resources to the startup ecosystem and fuel new business ventures, strengthening the broader economy,” he points out.
Highlighting the Government’s focus on priority spending and fiscal discipline, Rathore says the government has identified key growth levers while maintaining controlled, strategic spending in priority sectors.
“With a disciplined approach to fiscal deficit management, the administration continues to drive economic expansion and supports the vision of “Atma Nirbhar Bharat,” he adds.
A new direction amid tariffs
Speaking to Global Indian, Lion Dr Kiron, Managing Director, Suchirindia Group, which is into real estate and hospitality feels the development is a hugely positive one for India, as it comes in the backdrop of Donald Trump imposing higher tariffs on imports from the country.
“While a lot of discussion is currently centred around the impact Indian manufacturers and service providers will have due to the increased tariffs, this development will give a new direction to the economic outlook of India,” he feels.
Dr Y. Kiron, Managing Director, Suchirindia Group
A modest but meaningful shift
Though the move from BBB- to BBB by S&P Global is modest in technical terms, Dr Kiron says it also lowers India’s risk profile, attracts more foreign capital, reduces borrowing costs, and strengthens India’s geopolitical influence as one of the fastest-growing large economies.
“It signals improved economic stability, fiscal discipline, and growth prospects. Global investors and financial institutions will see India as a lower-risk destination, enhancing its standing on the international front,” explains Dr Kiron.
He says India’s economic policies are in the right direction, as is evident from the development.
Boost to FDI and the $5 trillion vision
“This upgrade will enable Indian corporations a great deal. It could encourage more FDI and FII inflows, and boosts forex reserves. Access to lower cost funds can accelerate financing for various infrastructure projects, and put India on the path to reach the set target of USD 5 trillion economy.”
In conclusion, says Dr Kiron, India is now one step closer to becoming a more attractive alternative to China for global supply chains.
“Indian stock markets will appreciate this development, and our Rupee too could appreciate, as stronger rating reduces the risk of capital flight, ” he says, adding that the upgrade would validate the government’s reforms, and boost confidence among domestic entrepreneurs, reinforcing the narrative that India is on a sustainable growth path.
Inclusive growth and jobs challenge
Anand Mehta, author of Money Vibe has a different take. He feels this is a growth for India which is great but this growth is only for 20 percent of the population.
Anand Mehta, author of Money Vibes
“India needs to upgrade the lower middle class and upper middle class by giving more benefits to the segment which is untapped,” he feels. Mehta feels the economy will grow only when the 80 percent of Indians are given more benefits and security. “We have to create more jobs for everyone. India needs to focus on our own people first. Ranking is great on papers, real ranking is if the 80 percent people are getting benefits from the new policies. Automatically, global ranking will increase,” he remarks.
As India celebrates this long-awaited upgrade, the real test will be ensuring that growth is inclusive, sustainable, and continues to strengthen the nation’s position as a trusted pillar of the global economy.
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