admin 
New Delhi, February 11:
India’s recently announced trade deals with the United States and the European Union (EU), along with the fiscal policy roadmap in the Union Budget 2026-27, continue to support India’s sovereign credit profile, according to a report by CareEdge Ratings.
The agency said these developments strengthen India’s CareEdge Global BBB+/Stable sovereign rating.
Trade Deals Reduce Uncertainty, Boost Export Competitiveness
CareEdge stated that India’s credit fundamentals remain strong due to:
- resilient growth prospects
- improving external visibility
- a calibrated approach to fiscal consolidation
The report added that recent trade agreements have reduced external uncertainty and improved India’s export competitiveness.
India-US Deal May Cut Tariffs to 18%
The report said the new India-US trade agreement is expected to lower US tariffs on Indian imports.
Tariffs may drop to 18%, from the current cumulative headline tariff of 50%.
CareEdge noted that the tariff cut could improve India’s relative competitiveness in global exports.
EU Engagement to Strengthen Export Diversification
CareEdge also highlighted that India’s trade engagement with the EU will support:
- diversification of exports
- increased export scale
- stronger medium-term growth prospects
The report said this will improve India’s external trade outlook.
Union Budget 2026-27 Signals Fiscal Discipline
CareEdge said the Union Budget 2026-27 reflects a steady approach to fiscal consolidation.
The report noted that the budget remains focused on maintaining deficit targets. It also continues to prioritise:
- public capital expenditure
- investment-led expansion
- medium-term growth stability
According to the report, this strengthens macroeconomic stability.
Debt Levels High, But Growth Drivers Support Stability
While the report acknowledged that India’s public debt and interest burden remain elevated, it said several factors support stability, including:
- resilient domestic demand
- diversified growth drivers
- comfortable external buffers
CareEdge expects these strengths to support India’s macroeconomic stability in the near and medium term.
Fiscal Credibility Depends on Revenue and Debt Management
The agency said India must continue progress on:
- revenue mobilisation
- disinvestment targets
- effective debt management
It added that consistent medium-term fiscal consolidation will help maintain sovereign rating strength.
Rating Outlook Remains Positive
CareEdge concluded that the combination of improved trade dynamics and disciplined fiscal policy supports India’s BBB+/Stable rating outlook.
About The Author
