S&P upgrades India credit rating to 'stable'

"India's improved political setting offers a conducive environment for reforms, which could boost growth prospects and improve fiscal management," NDTV quoted the rating agency as saying in its statement.

"We believe the current administration will remedy, to varying degrees, the growth impediments--policy paralysis, energy supply bottlenecks, and administrative obstacles," it added.

India's rating continues to remain at BBB minus, S&P said.

S&P's rating boost comes at a time when Prime Minister Narendra Modi will be meeting CEOs of several Fortune 500 companies in the US to promote India as a global investment destination.

Between April and June 2014, India registered its fastest growth in nine quarters and the new government has vowed to keep the fiscal deficit under control at 4.1 per cent of GDP.

"We expect the new administration to adhere to its stated fiscal consolidation program, even though we acknowledge that planned revenues may not fully materialize and subsidy cuts may be delayed," S&P said.

Standard & Poor's and Fitch Ratings had lowered their outlook on India to "negative" in 2012.