Japan's R&I ups India's sovereign rating, third upgrade in 2025

Japan's Rating and Investment Information, Inc. (R&I) has upgraded India's long-term sovereign credit rating to 'BBB+' from 'BBB', while retaining the "Stable" Outlook for the Indian economy.

This is the third such upgrade of India by a sovereign credit rating agency this year, following S&P's upgrade to 'BBB' (from BBB-) in August 2025 and Morningstar DBRS' upgrade to 'BBB' (from BBB (low)) in May 2025.

As per R&I's India sovereign rating review published on Friday, the ratings upgrade is supported by India's position as one of the world's largest and fastest-growing economies, underpinned by its demographic dividend, robust domestic demand, and sound government policies.

R&I in its report recognises the progress in fiscal consolidation by the government, driven by buoyant tax revenues and rationalisation of subsidies, and a manageable level of debt, along with high growth.

It also highlights India's strengthened external stability, reflected in modest current account deficit, stable surpluses in services and remittances, low external debt-to-GDP ratio, and sufficient forex cover.

In a statement, the Finance Ministry welcomed the rating upgrade by R&I, and said the government remains committed to building on this momentum through policies that promote inclusive, high-quality growth alongside fiscal prudence and macroeconomic stability.

Three credit rating upgrades for India in five months reflect increasing global recognition for India's robust and resilient macroeconomic fundamentals and prudent fiscal management, and underscore global confidence in India's medium-term growth prospects amid prevailing global uncertainties, the ministry added.