Global rating agency Moody’s confirmed on Monday that India’s long-term local and foreign-currency issuer ratings, as well as the local-currency senior unsecured rating, remain at ‘Baa3’ with a ‘stable’ outlook, supported by strong economic growth and a solid external position. Moody’s also upheld India’s short-term local-currency rating at P-3. The agency stated that this affirmation and stable outlook reflect their assessment that India’s existing credit strengths—characterized by its large, rapidly growing economy, stable external position, and reliable domestic financing for ongoing fiscal deficits—will be maintained. These strengths provide resilience against negative external trends, especially given high US tariffs and other international policies that limit India’s ability to attract manufacturing investments.
However, India’s credit strength is counterbalanced by persistent fiscal weaknesses, which are expected to continue.
