India’s economic resilience and reform-driven growth have received another strong endorsement as Japanese credit rating agency Rating and Investment Information, Inc (R&I) upgraded the country’s long-term sovereign credit rating to BBB+ from BBB, while maintaining a stable outlook. This marks the third upgrade by a global rating agency in 2025, reinforcing India’s position as one of the most dynamic and robust major economies in the world.
The government welcomed the decision, which reflects growing international confidence in India’s macroeconomic stability and policy direction. R&I praised the administration’s strategic initiatives under Prime Minister Narendra Modi, particularly those aimed at attracting foreign manufacturers, expanding infrastructure, institutionalising legal frameworks to improve the business environment, reducing energy import dependency, and enhancing economic security.
The agency noted that despite increased capital expenditures, the government has successfully reduced the fiscal deficit, driven by strong domestic demand and a surge in tax revenues, coupled with subsidy rationalisation. This fiscal discipline, combined with high growth, has contributed to the upgrade.
Earlier this year, S&P raised India’s rating to BBB from BBB– in August, and Morningstar DBRS upgraded it to BBB from BBB (low) in May. These successive upgrades underscore the country’s sustained economic momentum and its ability to navigate global uncertainties.
R&I’s review highlighted India’s demographic dividend, robust domestic consumption, and sound policy framework as key strengths. It also acknowledged the country’s improved external stability, citing a modest current account deficit, consistent surpluses in services and remittances, a low external debt-to-GDP ratio, and adequate foreign exchange reserves.
While the recent increase in US tariffs was flagged as a potential risk, the agency observed that India’s limited reliance on US exports and its domestic demand-driven growth model would mitigate the impact. It also noted that although GST rationalisation may lead to revenue losses, the stimulation of private consumption is expected to offset the negative effects to some extent.
The upgrade signals global confidence in India’s medium-term growth prospects and its ability to maintain fiscal prudence while pursuing ambitious development goals.
