Moody's on Friday upgraded India's credit rating for the first time in more than a decade, citing economic reforms introduced under Indian Prime Minister Narendra Modi.

The move comes almost two months after the Moody's and Standard & Poor's lowered their ratings on regional rival China citing the country's ballooning debt burden.

Moody's raised its rating on India to Baa2 from Baa3, the first such move since January 2004, saying recent reforms would enhance productivity, stimulate foreign and domestic investment and foster “strong and sustainable growth”.

These include a new national goods and services tax and a controversial 2016 ban on high-value bank notes aimed at tackling widespread tax evasion.

“Continued progress on economic and institutional reforms will, over time, enhance India's high growth potential,” the agency said.

Modi swept to power in 2014 on a promise to reform India's economy and create jobs for a burgeoning youth population.

But critics point out that joblessness remains high and the reforms have not come without pain.

They have acted as a drag on growth, which hit a three year low of 5.7 per cent in the first quarter of the current financial year.

Indian Finance Minister Arun Jaitley called the upgrade “a belated recognition of all the positive steps which have been taken in India in the last few years”.

“It's extremely encouraging that there's an international recognition and it merely furthers our determination to follow the track which we have embarked upon,” Jaitley told reporters.

The move boosted Indian stocks more than 1pc, while the rupee strengthened to 64.86 against the dollar, from Thursday's 65.29.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Smog hazard
Updated 05 Nov, 2024

Smog hazard

The catastrophe unfolding in Lahore is a product of authorities’ repeated failure to recognise environmental impact of rapid urbanisation.
Monetary policy
05 Nov, 2024

Monetary policy

IN an aggressive move, the State Bank on Monday reduced its key policy rate by a hefty 250bps to 15pc. This is the...
Cultural power
05 Nov, 2024

Cultural power

AS vital modes of communication, art and culture have the power to overcome social and international barriers....
Disregarding CCI
Updated 04 Nov, 2024

Disregarding CCI

The failure to regularly convene CCI meetings means that the process of democratic decision-making is falling apart.
Defeating TB
04 Nov, 2024

Defeating TB

CONSIDERING the fact that Pakistan has the fifth highest burden of tuberculosis in the world as per the World Health...
Ceasefire charade
Updated 04 Nov, 2024

Ceasefire charade

The US talks of peace, while simultaneously arming and funding their Israeli allies, are doomed to fail, and are little more than a charade.