“India should make a strong case for ratings upgrade. The developing countries will have to make a strong case for where they are and how they should be looked at. In our context, BRICS needs to ensure that our voice is heard,” PTI quoted Kamath as saying.
India has been critical of global rating agencies like Moody’s, S&P, and Fitch for pegging its sovereign credit rating at a much lower BBB- level despite recent economic growth and stable macroeconomic indicators.
Global rating agencies, however, point at India’s high public debt levels and bank non-performing assets as the reason for status quo.
India’s concerns over the methodology adopted by ratings agencies have been shared by other BRICS member countries, including Russia, China, South Africa and Brazil, prompting the multilateral body to set up an independent ratings agency based on market-oriented principles.
The idea of a BRICS ratings agency emerged during the 2015 BRICS summit in Ufa and was affirmed by the Goa Declaration at the eighth BRICS Summit.
BRICS has started engaging financial experts on a business model for the new ratings agency as well as what methodology it would adopt to rate itself and others.