S&P Outlook Upgrade For India Shows Confidence Of Global Rating Agencies: SBI Chairman

India's sovereign rating outlook upgrade from 'stable' to 'positive' by S&P Global is a reflection of the confidence shown by global rating agencies, said Dinesh Kumar Khara, chairman of State Bank of India.

"The way I look at this improvement in rating in terms of outlook to positive from stable, augurs very well as far as the likely scenario is concerned," he told NDTV Profit in an interview.

The country is already witnessing a reduction in its fiscal deficit from 5.8% to 5.1% in FY25, and if the trajectory continues, one may see it coming down to 4.5% in FY25–26, Khara said. All this was riding on decent growth in GDP and GST collections improving month-on-month, he said.

"Eventually, it should lead to an upgrade in our sovereign credit rating too... These are early steps and a very positive sign for the Indian economy... The efforts they have put in the past have been recognised by a global rating agency," he said.

The SBI chairman said that the macro-level impact of the outlook upgrade makes a huge difference for global investors, as they always look at sovereign ratings.

"...will give them encouragement to stay invested in the country, bring in more money, and offer money at even cheaper rates... It all augurs very well for the Indian economy," he said.

Responding to a question on bond yields, Khara said that multiple factors impact this, and India's inclusion in JPMorgan indices is also a positive for the yields.

But how much it will improve is also dependent on how the interest rate market looks across the globe, he said.

"...as far as the Indian economy is concerned, there is attractiveness... we have to see it in a very positive light... the outlook change is a reflection of confidence shown by global rating agencies," Khara said.

On Wednesday, S&P Global revised India's sovereign outlook from 'stable' to 'positive', citing confidence in the country's policy stability, economic reforms, and infrastructure investments.

The rating agency maintained its 'BBB-' long-term and 'A-3' short-term unsolicited foreign and local currency sovereign credit ratings.