India Achieves Third Sovereign Credit Rating Upgrade in 2025
New Delhi: The Japanese credit rating agency, Rating and Investment Information, Inc. (R&I), has upgraded India’s long-term sovereign credit rating to ‘BBB+’ from ‘BBB’, while retaining the “Stable” outlook for the Indian economy.
This is the third sovereign credit rating upgrade India has received this year. It follows the upgrade by S&P Global to ‘BBB’ (from BBB-) in August 2025 and Morningstar DBRS to ‘BBB’ (from BBB (low)) in May 2025, reflecting growing global recognition of India’s robust macroeconomic fundamentals and prudent fiscal management.
According to R&I’s rating review published today, India stands as one of the world’s largest and fastest-growing economies, supported by its demographic dividend and strong domestic demand. The agency noted the Government’s progress in fiscal consolidation, driven by buoyant tax revenues and rationalisation of subsidies, alongside a manageable debt level paired with high growth.
R&I highlighted India’s strengthened external stability, citing a modest current account deficit, steady surpluses in services and remittances, a low external debt-to-GDP ratio, and ample foreign exchange reserves. The agency stated that risks related to India’s financial system remain limited.
While acknowledging the recent increase in tariffs by the United States as a risk factor, R&I observed that India’s limited reliance on US exports and its domestic demand-driven growth model will largely contain the impact. The agency also commented on the Goods and Services Tax (GST) rationalisation, noting that any revenue losses are expected to be offset partially by increased private consumption stimulated by the reform.
R&I praised Prime Minister Narendra Modi’s administration for policies that attract foreign manufacturers to India, develop infrastructure, institutionalise a strong legal framework to improve the business environment, reduce dependency on energy imports, and ensure economic security.
The three credit rating upgrades within five months by these leading global agencies signify strengthening global confidence in India’s medium-term growth prospects amid global uncertainties. The Government of India remains committed to policies that promote inclusive, high-quality growth alongside fiscal prudence and macroeconomic stability.
Why Sovereign Credit Ratings Matter
Sovereign credit ratings are independent evaluations of a country’s ability to repay its debt. They influence investor confidence, borrowing costs, and access to global financial markets. Higher ratings signal lower risk to investors, enabling countries to borrow money at lower interest rates.
India’s recent upgrades help reduce the government’s borrowing costs, which can also lower interest rates for businesses and consumers. Improved ratings can attract foreign capital, strengthen economic stability, boost infrastructure investments, and support long-term growth.
While India has steadily improved its economy, these rating changes affirm global recognition of its resilient fundamentals and robust fiscal management. They also provide a stronger platform for India to compete as a preferred investment destination and economic partner worldwide.
– global bihari bureau
