Prime Minister Narendra Modi is lifting India up, placing it where it belongs — on the world’s economic map, closer to China and further away from the neighboring economies of Pakistan and Bangladesh.
India’s rise in the last couple of years is evident in international rankings. Like the World Bank’s 2017 ranking of “ease of doing business,” from 130 last year to 100 this year. And the World Economic Forum Report (WEFR) competitiveness ranking, which ranked India 40th out of 137 countries included in the report, the highest it has ever been, up from 71st three years ago.
But that’s old news. The new news is that Moody’s Investors Service has upgraded India’s sovereign bond rating for the first time in nearly 14 years.
That’s a welcome endorsement for Modi’s structural reforms, which are expected to boost growth and reduce the debt burden.
India’s upgrade comes at a time when the international credit rating agency has been downgrading China—see tables.
Chinese and Indian Credit Rating
Credit markets have yet to take notice, as higher oil prices in recent days have pushed 10-year treasury yields higher—see tables.
Chinese and Indian 10y Bond Yields
Will Modi’s magic last? It remains to be seen.
The author is a Professor and Chair of the Department of Economics at LIU Post in New York. He is also a Forbes contributor and the opinions expressed are his own. (Courtesy: www.forbes.com)