In a significant boost to India’s economic prospects, leading global rating agency S&P Global Ratings has upgraded India’s economic outlook from “stable” to “positive” after a decade, citing strong growth momentum, continued reforms, and improving fiscal management.
The agency retained India’s sovereign credit rating at BBB-minus, which remains the lowest investment-grade rating, but highlighted that the country’s economic fundamentals have strengthened considerably in recent years.
According to S&P Global Ratings, the revised outlook reflects confidence in policy continuity, sustained infrastructure investment, and ongoing economic reforms irrespective of the outcome of the general elections.
In its statement, the agency said the positive outlook is based on expectations that policy stability, fiscal discipline, and structural reforms will continue to support India’s long-term growth trajectory. It also noted that prudent monetary and fiscal policies could gradually reduce the government’s debt burden and improve the economy’s resilience over the next two years.
The rating agency projected India’s GDP growth to remain close to 7 percent annually over the next three years, supported by rising infrastructure spending, better connectivity, and increased quality of government expenditure.
S&P also pointed to the government’s commitment towards fiscal consolidation, estimating that the general government deficit could decline to 6.8 percent by fiscal year 2028 from 7.9 percent in fiscal year 2025.
The outlook upgrade marks the first positive revision by the agency since September 2014, when India’s outlook was placed at stable.
Despite the improved outlook, S&P maintained the sovereign rating at BBB-minus due to concerns related to fiscal vulnerabilities and high public debt levels. However, the agency indicated that continued reforms and sustained economic growth could potentially lead to a ratings upgrade within the next 24 months.
