India’s long-term sovereign credit rating has been upgraded to ‘BBB+’ with a Stable outlook by Japan-based Rating and Investment Information, Inc. (R&I), marking the country’s third sovereign rating upgrade this year.
The Ministry of Finance welcomed the move, calling it a strong endorsement of India’s robust macroeconomic fundamentals and sound fiscal management. The upgrade follows S&P’s revision to ‘BBB’ in August 2025 and Morningstar DBRS’ upgrade to ‘BBB’ in May 2025, underscoring growing global confidence in India’s economy.
According to R&I’s sovereign review, the upgrade reflects India’s position as one of the world’s fastest-growing economies, supported by its demographic dividend, buoyant domestic demand, and effective government policies. The agency highlighted progress in fiscal consolidation, driven by rising tax revenues, subsidy rationalisation, and a manageable debt profile, along with strong growth prospects.
R&I also noted 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 adequate foreign exchange reserves.
While acknowledging risks such as the recent U.S. tariff hike and near-term revenue loss from GST rationalisation, the agency said the impact would likely be contained due to India’s domestic demand-driven growth model and the boost to private consumption expected from tax reforms.
The report further praised the Narendra Modi government’s policies aimed at attracting foreign manufacturers, developing infrastructure, improving the business environment, and reducing energy import dependence, all of which enhance India’s long-term economic security.
With three upgrades from major rating agencies in 2025, India’s global credit profile has strengthened significantly, reinforcing its standing as one of the most dynamic and resilient economies amid global headwinds. The government reiterated its commitment to inclusive, high-quality growth, fiscal prudence, and macroeconomic stability as it continues to build momentum in the years ahead.
