New Delhi, Aug. 15 -- Even as India's economy faces external uncertainty, we can relish a significant piece of good news. Standard & Poor's has upped its rating of India's sovereign creditworthiness to BBB from BBB-, citing strong output growth and an improved public expenditure profile.

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Though India could be slapped with tariffs of 50% by the US before month-end, the rating agency believes their effect will be "manageable" given the economy's low reliance on trade, with 60% of its growth stemming from domestic consumption.

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With the upgrade, India's rating has moved one notch above the...