‘Much required': PM EAC member Sanjeev Sanyal welcomes S&P rating upgrade; says India still ‘underrated'
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Reacting to S&P's move to lift India's rating from 'BBB-' to 'BBB', Sanyal was quoted by ANI as saying that there was a longstanding gap between India's actual performance and its rating.
'I am pleased to hear that S&P has upgraded India's sovereign rating… the difference between what the ratings were being given by the three big rating agencies and my own model suggested was a gap of two notches,' he said.
Sanyal added that similar upgrades from other major rating agencies could follow in the coming years, noting, 'Given India's economic performance, we should expect a similar upgrade by the other two agencies… even after this upgrade, India is probably underrated by one notch.'
S&P said its decision reflected India's fiscal consolidation, strong growth momentum and sustained infrastructure push, while revising the country's transfer and convertibility assessment to 'A-' from 'BBB+'.
The agency highlighted real GDP growth averaging 8.8 per cent in FY22–FY24, the fastest in Asia-Pacific, with projections of 6.8 per cent annually over the next three years.
According to ANI, the rating agency credited India's domestic consumption-driven economy, which makes up about 60 per cent of GDP, for its resilience to global shocks, including new US tariffs and changes in energy import patterns.
It also pointed to rising capital expenditure, with Union capex expected to reach Rs 11.2 trillion in FY26, or 3.1 per cent of GDP, up from 2 per cent a decade ago.
S&P Global Ratings director YeeFarn Phua said recent US tariff measures, including a combined 50 per cent duty on crude oil linked to Russian trade, would have little impact on India's growth since exports to the US account for only about 2 per cent of GDP.
The agency projects India's general government deficit to narrow from 7.3 per cent of GDP in FY26 to 6.6 per cent by FY29, supported by what it called 'a vibrant economy, a strong external balance sheet, and democratic institutions that contribute to policy stability and predictability.'
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