Trump’s “Dying Economy” Remark Backfires: India Gets Historic S&P Sovereign Rating Upgrade After 18 Years
Just a few days ago, former US President Donald Trump had mocked India’s growth story by calling it a “dying economy.” But in a dramatic turnaround, the world’s leading rating agency S&P Global has upgraded India’s sovereign credit rating after 18 long years. This major development not only silences critics but also highlights India’s rising economic strength on the global stage.
So, what led to this historic move? Why has India’s rating been upgraded now, and what will it mean for the Indian economy, foreign investment, and global perception? Let’s dive into the complete analysis.
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What Exactly Did Trump Say About India?
In one of his recent public remarks, Donald Trump took a jibe at India, questioning the pace of its economic growth and sarcastically labeling it as a “dying economy.”
His statement sparked debates across the world. Many analysts saw it as political rhetoric aimed at boosting his domestic image, while others felt it reflected outdated perceptions of India’s growth story.
However, within days of this remark, the S&P Global upgrade came as a powerful counter to Trump’s claim, showcasing that India’s fundamentals remain robust.
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S&P Global’s Historic Decision: 18 Years in the Making
S&P Global Ratings, one of the world’s top three credit rating agencies, has upgraded India’s sovereign credit rating for the first time in 18 years.
Previous Rating: BBB- (Lowest investment grade)
New Rating: BBB (Improved investment grade)
Outlook: Stable
This upgrade is seen as a strong vote of confidence in India’s economic reforms, fiscal stability, and long-term growth prospects.
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Why Did S&P Upgrade India Now?
The upgrade didn’t happen overnight. S&P considered several macroeconomic and policy-driven factors before making this decision.
1. Strong GDP Growth
India is now the fastest-growing major economy in the world, with GDP growth consistently above 6%. Despite global challenges like inflation, energy crises, and geopolitical tensions, India has shown remarkable resilience.
2. Robust Foreign Exchange Reserves
India’s forex reserves crossing $650 billion provided a strong cushion against external shocks, boosting investor confidence.
3. Fiscal Reforms and GST
Structural reforms like GST, Insolvency and Bankruptcy Code (IBC), and digital tax compliance have improved the transparency of India’s financial system.
4. Manufacturing & Make in India Push
India’s efforts to become a global manufacturing hub under “Make in India” and “Atmanirbhar Bharat” initiatives impressed global rating agencies.
5. Political Stability
With a stable government and consistent policy-making, India is seen as a reliable investment destination compared to many emerging markets.
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Impact of the Upgrade on India’s Economy
This sovereign rating upgrade carries massive implications for India’s economic future.
1. Lower Borrowing Costs
When sovereign ratings improve, India can borrow from international markets at lower interest rates. This directly reduces the cost of infrastructure financing.
2. Increase in Foreign Investment
Global investors like pension funds, sovereign wealth funds, and foreign institutions rely heavily on ratings. The upgrade makes India a more attractive and safer destination for long-term investments.
3. Stock Market Boost
The Indian stock market often reacts positively to credit upgrades. This decision is expected to give Nifty and Sensex an additional boost as global liquidity flows into India.
4. Strengthened Currency
A stronger rating improves confidence in the Indian Rupee, making it less vulnerable to sharp depreciation against the US dollar.
5. Enhanced Global Image
Perhaps most importantly, the upgrade enhances India’s global economic reputation, directly countering narratives like Trump’s “dying economy” claim.
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Why the Timing Matters
The timing of S&P’s move is crucial. The world economy is under strain due to:
The Russia-Ukraine war and rising energy prices.
The US-China trade tensions.
Global slowdown fears and tightening by central banks.
Despite these challenges, India’s economic fundamentals have remained strong. By upgrading India now, S&P signals that India is not just surviving global shocks—it is emerging as a future growth leader.
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Comparison with Other Countries
To understand the significance, let’s compare India with other economies:
China: Facing property sector crisis and slowing growth.
Europe: Struggling with energy dependency and stagnation.
US: Dealing with inflation and debt ceiling debates.
India: Stable, growing above 6%, with long-term structural reforms.
Clearly, global investors are finding India a bright spot in an otherwise uncertain economic landscape.
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Expert Reactions on the Upgrade
Indian Government: Finance Ministry welcomed the move, calling it a validation of India’s reform-driven growth.
Economists: Many analysts see this as a “game-changer” that will accelerate FDI inflows into India.
Global Investors: International funds are expected to raise their allocation towards India after this decision.
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Trump vs. India: The Irony
Trump’s remark about India being a “dying economy” has now aged poorly. While political leaders often make provocative statements, facts and data tell a different story.
India’s GDP is growing faster than the US.
India’s population dividend makes it a long-term growth engine.
India is becoming a major hub for technology, manufacturing, and startups.
The S&P upgrade stands as a strong rebuttal to Trump’s criticism.
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Future Outlook for India
The road ahead looks promising but not without challenges.
Positives:
Strong consumer demand
Young workforce
Expanding digital economy
Global companies shifting supply chains from China to India
Risks:
High unemployment in some sectors
Rising fiscal deficit concerns
Inflationary pressures from global oil prices
Still, with S&P’s recognition, India is better positioned to tackle these challenges head-on.
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Conclusion
Donald Trump may have dismissed India as a “dying economy,” but the reality is the exact opposite. The S&P sovereign rating upgrade after 18 years proves that India is not only alive but thriving on the world stage.
This milestone will:
Boost investor confidence
Lower India’s borrowing costs
Strengthen India’s global image
Lay the foundation for even faster growth in the next decade
India’s economic story is one of resilience, reform, and rising global stature. Far from being a “dying economy,” India today represents one of the world’s most promising growth frontiers.
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