In a significant boost to India's economic outlook, Rating and Investment Information, Inc. (R&I), a Japanese credit rating agency, has upgraded India's long-term sovereign credit rating to 'BBB+' from 'BBB' while maintaining a "Stable" outlook on the Indian economy. This decision, made public on September 19, 2025, marks the third such upgrade for India by a sovereign credit rating agency this year, following similar actions by S&P in August 2025 and Morningstar DBRS in May 2025.
R&I's upgrade reflects increasing global recognition of India's robust and resilient macroeconomic fundamentals, prudent fiscal management, and strong medium-term growth prospects amidst prevailing global uncertainties. The agency's report highlights India's position as one of the world's largest and fastest-growing economies, supported by its demographic dividend, strong domestic demand, and sound government policies.
The Japanese rating agency also acknowledged the Indian government's progress in fiscal consolidation, driven by buoyant tax revenues and the rationalization of subsidies. R&I further noted India's manageable level of debt alongside high economic growth and strengthened external stability, evidenced by a modest current account deficit, stable surpluses in services and remittances, a low external debt-to-GDP ratio, and sufficient foreign exchange cover.
The Government of India has welcomed R&I's decision, viewing it as a reaffirmation of India's status as one of the most dynamic and resilient major economies globally. The Ministry of Finance has stated that the upgrade reflects India's strong domestic demand, fiscal discipline, and improved external stability.
This upgrade by R&I is particularly significant as it comes from a respected international rating agency and reinforces the positive assessments made by other agencies. S&P Global Ratings had previously upgraded India's long-term sovereign credit rating to 'BBB' from 'BBB-' with a stable outlook in August 2025, citing the country's economic resilience and sustained fiscal consolidation. Morningstar DBRS had also upgraded India's rating to 'BBB' from 'BBB (low)' in May 2025.
These upgrades collectively indicate a growing confidence in India's economic trajectory and its ability to manage its finances effectively. They are expected to have a positive impact on investor sentiment, potentially leading to increased foreign investment and improved access to international capital markets. A higher sovereign credit rating typically translates into lower borrowing costs for the government and Indian companies, as it signals a reduced risk of default.
R&I India, founded in 1999 and headquartered in Mumbai, is a well-known credit rating agency that offers extensive credit ratings and research services. It is a part of the global R&I Group, which provides extensive credit and investment analysis services worldwide.
The consecutive upgrades from multiple agencies highlight the effectiveness of the Indian government's policies in maintaining economic stability and promoting growth. They also underscore India's potential to achieve its long-term economic goals, including becoming a "Viksit Bharat" (Developed India) by 2047. However, agencies have also cautioned that maintaining fiscal discipline and continuing infrastructure investments are crucial to sustaining this positive momentum. Any erosion of political commitment to fiscal consolidation or a material slowdown in economic growth could lead to downward pressure on the ratings.
