The rating agency appreciates “New Delhi’s commitment to budgetary sanitation” and its “dynamic economic growth”.
The S&P Global Ratings rating agency noted on Thursday the long -term sovereign note of India, justifying this decision by “New Delhi’s commitment to budgetary sanitation” and its “dynamic economic growth”.
The agency said in a statement report the rating of the fifth world economy of “BBB-” to “BBB”, adding that the impact of customs duties taken by US President Donald Trump against India should be “manageable”.
S&P noted that the perspective of long -term rating was “stable”.
“The upward revision of India’s rating reflects its dynamic economic growth, in a context of improving monetary policy,” the statement said. The agency also underlines “the government’s commitment to budgetary sanitation” and better adjustment of expenses.
If India remains the world’s great economy which is experiencing the fastest growth, the pace of this growth has slowed down in last year, partly due to a slowdown in demand and moderation of public spending.
New Delhi’s economic prospects have also been darkened in recent weeks by Trump’s decision to sanction its Russian oil purchases by threatening to increase customs duties by 25% to 50%.
But S&P believes that India’s growth prospects will not be compromised by this trade war, stressing that even 50% customs duties would not “brake growth”.
“India is relatively less dependent on foreign trade and around 60% of its economic growth comes from domestic consumption,” said the agency’s press release.
“Although this may ultimately have a punctual impact on growth, we believe that the overall impact will be marginal and will not compromise the long -term growth prospects of India,” adds the agency.
And even if India should stop importing Russian oil, the budgetary cost would be “modest” given the “low price difference between Russian crude and current international references”, adds SP.
