Moody's Ratings (Moody's) has today affirmed the Government of India's long-term local and foreign-currency issuer ratings and the local-currency senior unsecured rating at Baa3. They have also affirmed India's other short-term local-currency rating at P-3. The outlook remains stable. The rating affirmation and stable outlook reflect our view that India's prevailing credit strengths, including its large, fast-growing economy, sound external position and stable domestic financing base for ongoing fiscal deficits will be sustained, Moody's stated. These strengths lend resilience to adverse external trends, in particular as high US (Aa1 stable) tariffs and other international policy measures hinder India's capacity to attract manufacturing investment. India's credit strength are balanced by long-standing weaknesses on the fiscal side which will remain. Strong GDP growth and gradual fiscal consolidation will lead to an only very gradual decline in the government's high debt burden, and will not be sufficient to materially improve weak debt affordability, especially as recent fiscal measures to reinforce private consumption erode the government's revenue base, the ratings noted. India's long-term local-currency (LC) bond ceiling remains unchanged at A2 and its long-term foreign-currency (FC) bond ceiling remains unchanged at A3, the agency further noted.

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