Credit rating agency S&P Global upgraded India’s long-term unsolicited sovereign credit rating to "BBB" from "BBB-" on Thursday, citing economic resilience and sustained fiscal consolidation.

The agency had changed the outlook on India’s rating in May last year to positive from stable, pointing to strong growth and better quality of government expenditure.

"The upgrade of India reflects its buoyant economic growth, against the backdrop of an enhanced monetary policy environment that anchors inflationary expectations," the rating agency said in a statement.

"Together with the government's commitment to fiscal consolidation and efforts to improve spending quality, we believe these factors have coalesced to benefit credit metrics," it added.

Following the announcement, the Indian rupee strengthened to 87.58 against the dollar from 87.66, while the benchmark 10-year bond yield fell 7 basis points to 6.38 per cent.

The rating agency also said it had revised its transfer and convertibility assessment to 'A-' from 'BBB+'.

S&P said it could lower the country’s ratings if it found a weakening in political commitment to consolidate public finances, or if economic growth slowed significantly on a structural level to the point that it threatened fiscal sustainability.

It added that ratings could be raised further if fiscal deficits were reduced meaningfully so that the net change in general government debt fell below 6 per cent of GDP on a structural basis.