Notably, this marks the third upgrade by a global credit rating agency in 2025, following S&P’s upgrade to ‘BBB’ in August and Morningstar DBRS’ upgrade to ‘BBB’ in May.
The Government of India on Friday welcomed the decision of Japanese credit rating agency Rating and Investment Information, Inc. (R&I) to upgrade India’s long-term sovereign credit rating to ‘BBB+’ from ‘BBB’, while retaining a stable outlook.
Notably, this marks the third upgrade by a global credit rating agency in 2025, following S&P’s upgrade to ‘BBB’ in August and Morningstar DBRS’ upgrade to ‘BBB’ in May.
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According to a Finance Ministry statement, “The development further cements India’s position as one of the most dynamic and resilient major economies worldwide.”
R&I highlighted India’s status as one of the world’s largest and fastest-growing economies, supported by strong demographic fundamentals, robust domestic demand, and sound government policies.
It cited fiscal consolidation progress driven by buoyant tax revenues, rationalised subsidies, and a manageable debt level alongside high economic growth.
R&I also pointed to India’s strengthened external stability, noting a modest current account deficit, consistent surpluses in services and remittances, a low external debt-to-GDP ratio, and adequate foreign exchange reserves. It assessed risks in the financial system as limited.
“While the government has been increasing capital expenditures, it has managed to reduce the fiscal deficit thanks to the tax revenue increase backed by strong domestic demand as well as the cut of subsidies,” R&I said.
The agency acknowledged potential risks from recent US tariff hikes but observed that India’s domestic demand-driven growth and limited reliance on US exports would cushion the impact. It added that while GST rationalisation may cause revenue losses, this would likely be partly offset by stronger private consumption.
R&I further praised policies under Prime Minister Narendra Modi’s administration aimed at attracting foreign manufacturers, boosting infrastructure development, improving the business environment, reducing energy import dependence, and ensuring economic security.
The Ministry of Finance further said the third upgrade this year underscores global confidence in India’s macroeconomic fundamentals and medium-term growth prospects, despite global uncertainties. It reaffirmed its commitment to pursuing inclusive, high-quality growth while maintaining fiscal prudence and macroeconomic stability.
