India’s sovereign credit rating is currently BBB- with a stable outlook, according to S&P Global (NYSE:) Ratings: The BBB- rating is considered to be a speculative investment grade. This means that India’s debt is considered to be of speculative investment grade, but there is a reasonable expectation that it will be repaid.

Can India’s rating be upgraded by the S&P Global Ratings Agency?

In short, the answer may be yes, however, let us understand how is this possible theoretically.

India’s rating could be upgraded by the S&P Global Ratings Agency. However, it would depend on several factors, including:

Sustained improvement in fiscal metrics: India’s fiscal deficit has been high in recent years, and this has constrained its credit rating. S&P has said that it would consider an upgrade if India can demonstrate a sustained improvement in its fiscal position.

• – This could be achieved through a combination of measures, such as increasing tax revenue and reducing government spending.

Persistently lower inflation: Inflation has also been a concern for S&P, and the agency has said that it would like to see inflation come down to more manageable levels consistently below 6% before considering an upgrade.

• – This would require the government to take steps to control inflation, such as tightening monetary before considering an upgrade

Strong economic growth: India’s economy has been growing at a steady pace in recent years, and this is seen as a positive factor by S&P. However, the agency would like to see this growth continue sustainably before considering an upgrade.

• – The agency also said that it expects India’s economy to grow at an average of 6.7% over the next few years, which would be supportive of an upgrade

Improved external position: India’s external position has also been a concern for S&P, and the agency would like to see this improve before considering an upgrade.

Way Forward:

If India can demonstrate progress on these factors, then it is possible that S&P could upgrade its rating. However, it is important to note that there is no guarantee of an upgrade, and S&P will continue to monitor India’s performance closely.

Few Concerns :

Here are some additional factors that could also influence S&P’s decision on whether or not to upgrade India’s rating:

The performance of other emerging markets: S&P will compare India’s performance to other emerging markets when making its decision.

• – If other emerging markets are performing well, then this could make it more difficult for India to secure an upgrade.

The global economic outlook: The global economic outlook is also a factor that S&P will consider.

• – If the global economy is doing well, then this could make it more likely that India will receive an upgrade.

Conclusion:

Overall, it is possible that India’s rating could be upgraded by S&P Global Ratings. However, there is no guarantee of an upgrade, and S&P will continue to monitor India’s performance closely

It is important to note that S&P is not the only credit rating agency that assesses India’s creditworthiness. Other agencies, such as Fitch and Moody’s, also have ratings for India. If India’s rating is upgraded by S&P, the other agencies would likely also upgrade their ratings.

Here are some recent developments that could support an upgrade of India’s rating:
– The Indian government has taken steps to reduce its fiscal deficit. – Inflation has been consistently below 6% in recent months

– The Indian economy has been growing at a strong pace.

However, some risks could weigh on India’s rating. These include:

• A slowdown in economic growth.
• A rise in inflation.
• A political crisis.

Overall, the outlook for India’s rating is positive. If the government can continue to improve its fiscal metrics and inflation remains low, then S&P could upgrade India’s rating next year or so.

Overall, the chances of India’s rating being upgraded by S&P Global Ratings are good post the G20 summit concluded recently, and adding further ATH for indices like crossing 20K will create a positive note.

However, there are a few conditions that would need to be met for this to happen. If these conditions are met, then India’s rating could be upgraded to “BBB” or even “BBB+”. This would make it easier for the Indian government to borrow money from international lenders, and it would also boost the country’s overall economic confidence.

Reference for weekend read:

“J2k Series: Soaring Debt Levels Across the Globe, While India & France Improving” http://in.investing.com/analysis/j2k-series-soaring-debt-levels-across-the-globe-while-india–france-improving-200593088

“50th GST Council Meeting Update on Few Changes and Impacts on Sectors” http://in.investing.com/analysis/50th-gst-council-meeting-update-on-few-changes-and-impacts-on-sectors-200591495
“High Probability of India INX (BSE) & NSE IFSC Merger to Boost GF-Hub @ GIFT City” http://in.investing.com/analysis/high-probability-of-india-inx-bse–nse-ifsc-merger-to-boost-gfhub–gift-city-200597615
Stay tuned for more updates on the economy.