Global confidence in India grows, Japan's R&I upgrades sovereign rating to BBB+

India has received another significant boost to its global financial standing, with Rating and Investment Information, Inc. (R&I) of Japan upgrading the country’s long-term sovereign credit rating to ‘BBB+’ from ‘BBB’, while maintaining a “Stable” outlook for the Indian economy. This marks the third credit rating upgrade for India in 2025, following similar upgrades by S&P and Morningstar DBRS earlier this year. 

The upgrade from R&I highlights India’s status as one of the largest and fastest-growing economies globally. The agency points to India’s demographic dividend, robust domestic demand, and sound government policies as key factors driving its economic resilience. R&I’s assessment also lauded India’s fiscal consolidation efforts, driven by rising tax revenues and the rationalisation of subsidies, which have contributed to manageable debt levels and strong growth. 

According to the credit agency, India’s external stability has been strengthened, reflected in a modest current account deficit, stable surpluses in services and remittances, and a low external debt-to-GDP ratio. Additionally, the country’s foreign exchange reserves have bolstered confidence in its financial stability. 

R&I also noted that while there are risks, including potential challenges posed by global tariff increases, India’s domestic demand-driven growth model and limited reliance on U.S. exports should mitigate these impacts. The agency acknowledged the government's focus on capital expenditures, which have supported fiscal discipline, while cutting subsidies and boosting tax revenues. 

The agency further praised Prime Minister Narendra Modi’s administration for its policies aimed at attracting foreign manufacturers, enhancing infrastructure, reducing dependence on energy imports, and improving the business environment through legal reforms. 

This is the third upgrade India has received in just five months, underscoring the increasing global recognition of India’s economic resilience and prudent fiscal management. The Government of India has welcomed this development and reaffirmed its commitment to sustaining high-quality, inclusive growth while maintaining macroeconomic stability. 

These upgrades reflect a growing global confidence in India’s medium-term growth prospects amid ongoing global uncertainties. The government remains dedicated to building on this momentum with policies that promote economic security and long-term fiscal health.