India climate, water management indicate high credit exposure, says Moody's
This story was originally published at 17:55 IST on 22 June 2026
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NEW DELHI – India's physical climate and water governance show high credit exposure to risks such as heat stress and flooding, Moody's Ratings said in a report. The country's water management indicates "very high" credit exposure, driven by ageing water infrastructure and excessive groundwater depletion.
India's population represents about 18% of the global total but has access to only 4% of the world's freshwater resources, Moody's said, citing World Resources Institute. Water governance in India, rated "Baa3" by Moody's, is dispersed across more than 28 states, the rating agency said.
Pricing of water is highly subsidised--especially for agriculture, which consumes about 80% of the country's freshwater--while reallocation among sectors is slow, Moody's said. Many regions in India also lack resources to invest in necessary infrastructure, presenting credit exposure risks.
"Fragmented or inflexible frameworks are characterised by dispersed governance, weak pricing flexibility, slower reallocation, and less credible investment pathways," the rating agency said. "Such frameworks can result in more prolonged shortages, higher costs and greater industrial and public service disruptions. The result is higher risk of sustained fiscal pressure, delayed adjustment, and persistent credit strain." End
Reported by Shubham Rana
Edited by Rajeev Pai
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