India’s Growth Outlook Remains Robust Despite US Tariffs: S&P Global Ratings

AMN / New Delhi

India’s economic growth momentum remains strong and resilient, even in the face of rising US tariffs, according to S&P Global Ratings. In a major vote of confidence, the global rating agency upgraded India’s long-term sovereign credit rating from ‘BBB-’ to ‘BBB’ with a stable outlook — marking the country’s first upgrade in 18 years.

S&P attributed the upgrade to strong domestic demand, fiscal consolidation, and accommodative monetary policy. It forecast India’s economy to grow at an average rate of 6.8% over the next three years, buoyed by continued investment in infrastructure and structural reforms.

“India has consistently outperformed regional peers over the last few years,” said YeeFarn Phua, Director at S&P Global Ratings. “The government’s sustained focus on infrastructure development and fiscal discipline will be key to maintaining growth momentum,” he added.

Tariff Protection
S&P noted that India’s low reliance on global trade serves as a buffer against the potential drag from recent tariff increases by the US. This insulation helps support the country’s external stability even as global trade tensions rise.

“India’s growth is largely driven by internal factors — consumption and investment — rather than exports,” said Vishrut Rana, Asia-Pacific Economist at S&P.

Wider Impact of the Upgrade
Earlier this month, S&P had announced the upgrade ahead of India’s Independence Day, highlighting the country’s economic resilience and policy stability. Along with the sovereign rating upgrade, the agency also revised:

  • Short-term sovereign rating: From A-3 to A-2
  • Transfer & convertibility assessment: From BBB+ to A-

In addition, credit ratings of several major Indian financial institutions were raised, including:

  • Banks: State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Union Bank of India, Indian Bank, and Kotak Mahindra Bank
  • NBFCs: Bajaj Finance, Tata Capital, and L&T Finance

Looking Ahead
S&P emphasized that policy continuity, high infrastructure spending, and gradual fiscal consolidation will remain pivotal to sustaining long-term growth and investor confidence.

The upgrade reflects global investor recognition of India’s macroeconomic stability, reform momentum, and strategic independence in global trade — reinforcing its position as one of the world’s most promising emerging markets.

Leave a Reply

Your email address will not be published. Required fields are marked *