New Delhi: Amid escalating tensions with Pakistan, India's sovereign rating has been boosted by a notch to "BBB" by global ratings agency Morningstar DBRS from the lowest investment grade of "BBB (low)". The rating trend has also been upgraded to "stable" from "positive".
The agency has cited the country's structural reforms through infrastructure investments and digitalisation, fiscal consolidation, sustained high growth with macroeconomic stability, and a resilient banking system for the upgrade.
Morningstar DBRS' sovereign rating for India is now a notch above that of other major agencies-S&P, Moody's and Fitch-that have retained their ratings at the lowest investment grade for years.
"The upgrade reflects Morningstar DBRS' view that the cumulative and ongoing benefits of India's structural reform efforts are facilitating fiscal consolidation and helping sustain India's high potential growth rate," Morningstar said.
The external sector is strong, and a sound policy framework has helped the economy navigate challenging global conditions, it said. "While the imposition of US tariffs adds uncertainty to the outlook, India looks comparatively well-positioned, given the low level of goods exports to the US and the domestic-driven nature of the Indian economy," the agency added.
It has also upgraded India's short-term foreign and local currency ratings to R-2 (high) from R-2 (middle).
Source Name : Economic Times