Ratings agency Standard & Poor's on Monday lifted the outlook on India's "BB" long term foreign currency rating to positive from stable on the back of improving external liquidity.
The outlook on the "BB-plus" long-term local currency rating was also revised to stable from negative.
"The outlook revisions reflect India's improving external liquidity and better prospects for the government's debt burden to stabilize," S&P credit analyst Ping Chew said in a statement.
"In addition, India's robust foreign exchange reserves, which exceed 2000 percent of short-term debt, mitigate the risk of volatility in external confidence," Chew said.
S&P said India's sovereign ratings are underpinned by the country's good economic prospects, with growth in gross domestic product likely to trend over six percent over the medium term.
But the rating agency added that the sovereign ratings on India remained constrained by high public debt and serious fiscal inflexibility.
