Finance ministry meets Moody's execs, makes case for ratings upgrade

Finance ministry officials on Thursday met with analysts from Moody’s Ratings making its case for a ratings, upgrade on the back of macroeconomic stability, fiscal prudence and benign inflation, official sources said.  The meeting comes almost a week after India announced its provisional GDP numbers showing a rebound in the growth numbers with the four-quarter high of 7.4 per cent in the January-March period of 2024-25 (FY25).

 

While the discussions with the ratings agency come in the backdrop of recent India-Pakistan conflict and global trade tensions, Moody’s Ratings had recently said that India is better positioned than many other emerging markets to deal with US tariffs and global trade disruptions, due to robust internal growth drivers, a sizable domestic economy and a low dependence on goods  trade. 

 

  Moody’s said that Pakistan-India tensions, including the flare-up earlier in May, would weigh on Pakistan’s growth more than on India’s.  

It had said, however, that tariffs on most Chinese goods exports to the US will constrain global growth, and could potentially reduce India’s economic growth in calendar year 2025 to 6.3 per cent from 6.7 per cent.

  In May this year, global sovereign credit rating agency, Morningstar DBRS upgraded India’s long-term foreign and local currency — issuer ratings from BBB-low to BBB with a stable trend. Morningstar DBRS said that it expected the tensions between India and Pakistan to remain contained within the region and did not anticipate a meaningful impact on India’s medium-term growth prospects or creditworthiness.

  S&P Global ratings, however, had said that while no immediate rating actions had been taken, the situation due to regional tensions introduces material uncertainty that could weigh on sovereign credit profiles if they persist. 

In June 2020, Moody’s downgraded India's rating to ‘Baa3’ from ‘Baa2’ with a negative outlook, citing weak reform push and slow growth. However, in October 2021, the outlook on the rating was revised to stable.