India's Economic Resilience Recognized by S&P Global

In a significant endorsement of India's economic stability, S&P Global has upgraded the country's credit rating from 'BBB-' to 'BBB', accompanied by a stable outlook. This upgrade arrives at a critical juncture as India navigates the challenges posed by the Trump administration's threat of imposing 50% tariffs.

Stable Outlook Amidst Global Trade Tensions

The agency highlighted that India's stable outlook is underpinned by expected policy consistency and substantial infrastructure investments, which are poised to bolster long-term economic growth. S&P also downplayed the potential impact of US tariffs on India, citing the country's strong economic fundamentals and domestic consumption-driven growth model.

Trump's Tariffs: A Manageable Challenge for India

According to S&P, the effects of US tariffs on India are likely to be manageable, with domestic consumption accounting for about 60% of its economic growth. The agency also noted that any fiscal cost from switching crude oil imports from Russia would be modest, given the narrow price differential with international benchmarks.

India's Growth Trajectory Remains Unaffected

YeeFarn Phua, S&P Global Ratings Director, emphasized that India's limited reliance on trade, with exports to the US constituting only 2% of its GDP, insulates its economy from the tariffs' impact. S&P projects India's GDP growth to remain steady at 6.5% for the current fiscal year, mirroring previous performance.