Historical Context
India's 1991 Balance of Payments Crisis and Rating Trajectory
India's loss of its 'A' category sovereign rating in the early 1990s is directly tied to the 1991 Balance of Payments (BoP) crisis, when foreign exchange reserves fell to barely two weeks of imports, forcing India to pledge gold reserves and undertake IMF-backed structural reforms (liberalisation, privatisation, globalisation — the LPG reforms).
- Moody's rated India A2 in 1988; the rating was downgraded in the aftermath of the 1991 crisis and subsequent reforms
- The 1991 crisis triggered the New Economic Policy: devaluation of the rupee, dismantling of the License Raj, opening to foreign investment, and the start of India's gradual re-entry into investment-grade and now near-'A' territory
- India regained investment grade status from major agencies only in the 2000s (S&P and Fitch in 2007, Moody's in 2004)
● Tracked since February 27, 2026 · last seen September 08, 2026 · updates as the daily brief publishes
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