India's economic trajectory continues to draw positive global attention, with S&P Global Ratings elevating the nation's sovereign credit rating. On August 19, 2025, S&P upgraded India's long-term unsolicited sovereign credit rating from "BBB-" to "BBB" with a stable outlook, marking the first such upgrade in 18 years. The agency cited India's robust domestic demand, ongoing fiscal consolidation efforts, and supportive monetary policy as key factors underpinning this decision. S&P projects India's economy to grow at an average of 6.8% over the next three years, driven by infrastructure expansion and structural reforms. This upgrade also extended to several Indian financial institutions, including seven banks and three non-banking financial companies (NBFCs).
In a significant geopolitical and economic development, India and China are reportedly moving towards a thaw in their frosty relationship. Both nations have agreed on measures to foster a "stable, cooperative and forward-looking" relationship, which includes reopening border trade, promoting investment flows, and resuming direct flight connectivity. This comes as both countries face potential tariff threats from the United States, suggesting a strategic realignment to bolster economic ties.
Addressing concerns over potential US tariffs, the Indian government has expressed confidence in the economy's resilience. The Bharatiya Janata Party (BJP) asserted that India would be "least affected" by such tariffs, emphasizing the substantial contribution of domestic consumption (approximately 57-58%) to the nation's GDP. This strong internal demand is seen as a crucial buffer against external economic pressures.
Further economic discussions highlight the need for continued robust growth. A parliamentary panel has recommended that India recalibrate its export strategy, focusing on manufacturing competitiveness, leveraging artificial intelligence, and diversifying market access to achieve an ambitious annual growth rate of 8% for at least a decade. To support this, the investment rate in the economy would need to increase from the current 31% to around 35% of GDP.
Other notable business news includes the government's plans to introduce a bill to regulate real-money online gaming, potentially logging out such platforms. Additionally, there are discussions around reviving anti-profiteering rules under a GST 2.0 overhaul and the potential for a GST rate rejig to boost consumption, albeit with an estimated annual revenue loss.