In the world of credit ratings, names like Fitch, Moody’s, and S&P Global have long dominated, providing assessments on the economic health and creditworthiness of countries worldwide. However, an Indian agency, CareEdge, has now emerged to compete with these global giants. Introducing its platform, CareAge Global Ratings, the agency aims to offer sovereign credit ratings from an Indian perspective, marking a significant step toward establishing a local benchmark in this field.
What is CareAge Global Ratings?
CareEdge’s new platform, CareAge Global Ratings, will evaluate the creditworthiness of countries just as global agencies do. This is a pioneering step for an Indian agency to provide such ratings at a global level. Till now, only international agencies handled sovereign credit ratings for India and other nations. With this new initiative, CareEdge is establishing itself as a credible source for sovereign ratings on a global scale, aiming to offer an Indian viewpoint in an area traditionally dominated by Western institutions.
Current Ratings and India’s Position
CareAge Global Ratings has already evaluated the creditworthiness of 39 countries, assigning them sovereign credit ratings. Nations like Germany, the Netherlands, Singapore, and Sweden earned a top ‘AAA’ rating, while Australia, Canada, and the United States received ‘AA+’. Other notable countries like France, Japan, South Korea, the UAE, and the UK were rated ‘AA-‘, while Portugal was rated ‘A+’.
For India, CareAge has given a ‘BBB+’ rating, considering factors like economic recovery post-pandemic and the government’s ongoing infrastructure investments. Mehul Pandya, CEO of CareEdge, shared that the platform aims to extend ratings to around 15-20 additional countries over the next few years, offering valuable insights for emerging markets.
How CareAge Global Ratings Could Impact India’s GDP
The agency has an optimistic outlook for India’s GDP growth. It anticipates a decline in the general government debt-to-GDP ratio to 78% by FY 2029-30 and further to 73.5% by FY 2034-35. This projection comes as the Reserve Bank of India (RBI) faces pressure to reduce interest rates following recent moves by the U.S. Federal Reserve. CareEdge predicts that lower rates could encourage borrowing, which would support GDP growth.
These forecasts are supported by the agency’s belief in a combination of fiscal consolidation and continued investment in infrastructure, which it sees as essential for sustainable growth. With the RBI’s policy meeting approaching, CareEdge’s insights provide a new layer of analysis that could influence policy discussions and economic decisions in India.
Can CareEdge Compete with Foreign Rating Agencies?
While CareEdge has taken a bold step, experts say it will take time to challenge the established global agencies. Economist Sanjeev Sanyal noted that CareEdge will need to build a strong track record to gain credibility in predicting credit events. Since global giants like Moody’s and Fitch have decades of experience, CareEdge will have to demonstrate its accuracy and reliability consistently to compete on the same level.
An Opportunity for Local Perspectives
There have been longstanding concerns about the biases of Western rating agencies, especially when it comes to emerging economies. Critics argue that these agencies sometimes underplay the strengths of countries outside the West. Local agencies like CareEdge have the potential to offer a more balanced view, potentially correcting biases that have affected the way economies are perceived globally.
Additionally, the example of Hindenburg Research’s impact on individual companies and nations has shown how influential ratings can be. The entry of CareEdge into this space could provide an alternative perspective, offering insights that reflect local economic conditions more accurately.
As CareEdge steps into the international arena, its success could pave the way for other Indian agencies to enter the global credit rating market, offering new viewpoints and creating competition for established players. This could mark the beginning of a shift toward more diverse and representative global credit assessments, giving Indian and other emerging market perspectives a louder voice in global finance.
