India and Russia on Thursday vowed to develop a credit rating industry that is “independent from political conjecture”, a move that follows apprehensions about global agencies being biased towards large economies like the US and China.
The move assumes significance in the wake of several commentators and policy makers in India raising concerns that global rating agencies have not been upgrading India’s sovereign credit rating despite its improving economic and political fundamentals, even as China was viewed favourably by the same agencies.
Globally, there are a handful of rating agencies and most of them are based in the US.
In a joint declaration, Prime Minister Narendra Modi and Russian President Vladimir Putin said they would explore harmonisation of the respective laws in the two countries regarding credit ratings.
Most of the agencies including Fitch, S&P and Moody's have given India the lowest investment grade rating just a notch above the junk grade.
"We will coordinate our positions in order to develop a credit rating industry that is transparent for the market participants and independent from political conjecture.