Positive news for the Indian economy: US credit rating agency S&P upgraded India's credit rating from 'BBB negative' to 'BBB', suggesting a stable economy. This comes days after President Donald Trump jibed at the Indian economy as 'dead' and announced 25% tariffs on goods, later threatening additional 25% tariffs.
The US agency stated that the stable outlook is based on anticipated policy consistency and significant infrastructure investment, which are expected to enhance India's long-term economic growth. S&P said that the effects of US tariffs on India are likely to be manageable, forecasting growth over the next two to three years, terming it as "strong and sustain economic fundamentals."
S&P Global Ratings Director Yipharn Phua said, "I do not think the tariffs imposed on India will have any impact on economic growth. If we look at India's exposure to the US in terms of exports compared to GDP, it is only 2%."
S&P estimated that India's GDP growth rate will be 6.5% in the current fiscal year 2025-26, which is the same as the previous fiscal year 2024-25.
The Trump administration has imposed an additional 25% tariff on all Indian products, citing the purchase of Russian crude oil as an excuse. Later, Trump announced an additional 25% traffic, bringing the total to 50%, effective August 27.