Informist, Tuesday, Jul. 22, 2025

NEW DELHI – The government has strengthened its engagement with credit rating agencies through a structured interactive process to present India's perspective on the country's macroeconomic scenario and to address specific considerations of the agencies, Minister of State for Finance Pankaj Chaudhary said in a written reply to a question in the Rajya Sabha about the steps taken by the government to improve India's sovereign credit rating.

The finance ministry usually holds annual meetings with global credit rating agencies to discuss India's sovereign rating. The last such meeting was with Moody's Ratings in June.

"The government has made sustained efforts to strengthen India's overall economic outlook, thereby positively impacting its credit profile," Chaudhary said Tuesday. "These include maintaining sound macroeconomic fundamentals, such as steady growth, price stability, fiscal consolidation, a resilient external sector, robust foreign exchange reserves, a strong banking sector, and enhancing physical and digital infrastructure to support investment. Further, the emphasis laid by the government on robust capital expenditure, infrastructure build-up, financial sector reforms, ease of doing business, employment, and skill development contributes to long-term economic stability and growth."

Government officials have said on multiple instances that India's sovereign rating upgrade is long due. They have said rating agencies' assessment frameworks give higher weight to unfair parameters, which pose a hindrance to India's sovereign upgrade.

"According to the methodology documents published by the credit rating agencies, various quantitative and qualitative factors are used to determine the ratings of countries, including India," Chaudhary said in the reply. "These factors are broadly grouped under the major categories such as economic strength, fiscal strength and flexibility, monetary performance and resilience, external resilience, and institutional strength. The methodology and relative weight assigned to each factor vary across the major agencies in their respective rating processes."

Top rating agencies Fitch and Moody's have maintained their lowest investment-grade ratings of BBB- and Baa3, respectively, for India for several years now, with a stable outlook. S&P has also rated India BBB-, but it upgraded the outlook to positive last year. Toronto-based rating agency Morningstar DBRS had in May upgraded India to BBB from BBB(low) and changed the outlook to "stable" from "positive". End

Reported by Krity Ambey

Edited by Rajeev Pai

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