India Secures Third Sovereign Credit Rating Upgrade in 2025 as R&I Raises Rating to BBB+

India’s economic resilience continues to gain international recognition as Japan’s Rating and Investment Information, Inc. (R&I) has upgraded the country’s long-term sovereign credit rating to ‘BBB+’ from ‘BBB’, while retaining a Stable outlook. This marks the third upgrade of India’s sovereign rating in 2025, signalling growing investor confidence in the country’s fiscal and economic fundamentals.

Third Upgrade in Five Months

R&I’s decision follows two earlier rating upgrades this year, S&P upgraded India to ‘BBB’ (from BBB-) in August 2025, and Morningstar DBRS raised it to ‘BBB’ (from BBB (low)) in May 2025. With R&I’s move, India now holds improved ratings from three different agencies in just five months, a rare achievement that underscores its strengthening macroeconomic standing.

Drivers Behind the Upgrade

According to R&I’s sovereign rating review, the upgrade is anchored in India’s position as one of the world’s largest and fastest-growing economies, supported by:

• Demographic dividend providing a long-term growth driver
• Robust domestic demand sustaining expansion
• Sound government policies supporting fiscal and macroeconomic stability

The agency also noted progress in fiscal consolidation, aided by buoyant tax revenues, subsidy rationalisation, and a manageable debt profile.

Strong External Stability

R&I highlighted India’s improved external sector stability as a major factor behind the upgrade. The report cited:

• A modest current account deficit
• Stable surpluses in services exports and remittances
• A low external debt-to-GDP ratio
• Sufficient foreign exchange reserves ensuring cover against external shocks

These indicators reflect India’s ability to withstand global uncertainties while maintaining growth momentum.

Government’s Response

The Finance Ministry welcomed the upgrade, calling it an acknowledgment of India’s robust macroeconomic fundamentals and prudent fiscal management. The ministry reiterated the government’s commitment to inclusive and high-quality growth, coupled with fiscal discipline and continued macroeconomic stability.

It further emphasised that three sovereign rating upgrades in five months reflect the global recognition of India’s economic resilience and signal sustained confidence in its medium-term growth prospects despite prevailing global headwinds.

Read More: State Bank of India Lists $500 Million Bonds on NSE IX After India’s Rating Upgrade 

Conclusion

The upgrade by R&I to BBB+ places India a step higher on the global credit map and adds momentum to the positive trajectory set by earlier rating actions from S&P and Morningstar DBRS. Together, these upgrades highlight international confidence in India’s ability to balance high growth with fiscal prudence, making it an increasingly attractive destination for global investors.

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