Citing expected improvement in the macro-economic situation, global investment bank, Goldman Sachs today upgraded India's rating to 'market weight', from the earlier 'under-weight,' indicating bullishness in the short-term.Goldman Sachs also cited lower oil prices,and the government's push for policy reforms for the upgrade. Goldman Sachs noted that the Reserve Bank of India's latest move to raise the repo rate by 50 basis points was a clear sign in that it is vigilant in bringing down inflationary expectations.

According to Goldman Sachs, core inflation is expected to taper off in the autumn months. On policy reforms, Goldman Sachs said that over the past few months, there have been some encouraging developments on the political front in India, although it noted that much remains to be done.