Japanese credit rating agency raises India’s sovereign rating to BBB+ and stable, third upgrade this year
India’s economy just got a big thumbs-up from a top Japanese credit rating agency. On Friday, Rating and Investment Information, Inc (R&I) upgraded India’s long-term sovereign credit rating to “BBB+” from “BBB”, keeping the outlook stable. The Indian government welcomed the move, calling it a strong sign of the country’s bright future.
R&I praised Prime Minister Narendra Modi’s policies that draw foreign manufacturers to India, boost infrastructure, strengthen the legal system for better business, cut down on energy imports, and secure the economy. The agency noted how the government ramped up spending on big projects while smartly lowering the fiscal deficit. This happened thanks to higher tax collections from booming domestic demand and reduced subsidies.
This marks the third credit rating upgrade for India this year. It follows S&P’s bump to “BBB” from “BBB-” in August 2025 and Morningstar DBRS’s rise to “BBB” from “BBB (low)” in May 2025. These nods highlight India’s spot as one of the world’s fastest-growing and toughest major economies.
In its report, R&I pointed to India’s massive size and rapid growth, fueled by a young population, strong local demand, and solid government strategies. The agency spotlighted progress in fiscal consolidation—thanks to rising tax revenues and smarter subsidy cuts—along with manageable debt levels and high economic growth.
India’s external finances look solid too, with a small current account deficit, steady surpluses from services and remittances, a low external debt-to-GDP ratio, and plenty of foreign exchange reserves to cover needs.
R&I did flag risks like recent US tariff hikes, but it believes India’s low dependence on US exports and its focus on domestic demand will limit any damage. On the GST front, the agency expects some revenue dips from rationalization, but this could spark more private spending to balance things out.
Overall, this upgrade shows growing global trust in India’s medium-term growth, even as world uncertainties linger. It’s a win for the resilient Indian economy.
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