Overview

• India's long-term credit rating was raised from BBB (low) to BBB with a Stable trend, and short-term ratings upgraded to R-2 (high).
• Key drivers include an average GDP growth of 8.2% from FY22 to FY25, fiscal consolidation, and macroeconomic stability.
• India’s banking sector demonstrated resilience, with non-performing loans dropping to a 13-year low and strong capital adequacy ratios.
• Debt sustainability risks are deemed limited due to local currency denomination and long maturity structures, despite elevated public debt levels.
• Morningstar DBRS indicated further upgrades could occur if reforms to boost investment and improve medium-term growth continue.