International global rating agency, Moody’s Investors Service in its latest report has said that it may consider India for a rating upgrade if the government is successful in introducing more growth enhancing economic and institutional reform. Policies like relaxation of thresholds for Foreign Direct Investment (FDI) and a change in the monetary policy framework that fosters credibility will contribute to more stable economic environment.
The report stated that India's policymakers are likely to be successful in their efforts to introduce growth-enhancing, growth-stabilising economic and institutional reforms would lead to the rating being considered for an upgrade. Other measures have been delayed like the Goods and services Tax (GST) and now likely to be implemented with credit positive effects in the medium term. Other reforms have proven more politically difficult so far like land and labour reform.
Last year in April, Moody's had changed India's sovereign rating outlook to 'positive' from 'stable' and it stood at ‘Baa3’ citing reform momentum and Moody’s consider India for an upgrade in next 12-18 months. However, report added that the rating outlook could be revised to ‘stable’ if economic, fiscal and institutional strengthening appeared unlikely, banking system metrics remained weak or balance of payments risks rose.
Moody's said that the positive outlook on rating reflects their expectation that policies will support a more stable macroeconomic environment, with sustained growth accompanied by narrower fiscal deficits, low current account deficits, increased savings and investment and inflation that is within the central bank's targets.
Further, Moody's stated that the government in June had announced FDI liberalisation in nine sectors such as civil aviation, retail and private security services. This was the current government's second round of relaxation in FDI rules. Besides, in past two months the government has taken initiatives like inflation targeting monetary policy and also secured Parliament approval for passage of the bankruptcy, Sarfaesi and DRT laws and above all the long pending GST.
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: