Japan’s Rating and Investment Information, Inc. (R&I) has boosted India’s long-term sovereign credit rating to BBB+ with a Stable outlook, according to the Ministry of Finance. This marks the third upgrade in 2025, following similar actions by Morningstar DBRS in May and S&P Global in August. The recent decision highlights the increasing global trust in India’s economic strength and budget management. R&I highlighted the government’s progress on fiscal consolidation as a key factor. The fiscal deficit fell to 4.8 per cent of GDP in FY24 and is expected to decline further to 4.4 per cent in FY25. The combined debt of the Centre and states eased to about 80 per cent of GDP, which though still elevated, was assessed as sustainable given India’s robust nominal growth and the fact that most government securities are held by domestic investors.
India’s Sovereign Rating Upgraded to BBB+ (Stable) by Rating and Investment Information, Inc. (R&I), Japan
This is 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’… pic.twitter.com/4KYO7CTNNV
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External position remains stable
The Japanese agency also pointed to India’s strong external position. The current account deficit stayed below 1 per cent of GDP in FY24, while services exports, remittances and low external debt ratios added stability. Healthy foreign exchange reserves, sufficient to cover imports and short-term liabilities were seen as a key shield against global shocks.
Growth outlook stays positive
India’s economy expanded 6.5 per cent in FY24 and surged 7.8 per cent in Q1 FY25. For FY25, R&I expects growth of around 6.5 per cent, broadly in line with the Reserve Bank of India’s forecast. Over the medium term, growth is projected to remain in the mid-6% range, supported by strong domestic demand, infrastructure push, and favorable demographics.
Policy reforms and global confidence
R&I highlighted reforms under Prime Minister Narendra Modi’s administration aimed at attracting foreign manufacturers, boosting infrastructure, improving the legal and business environment and reducing dependence on imported energy. These steps, it said are strengthening India’s economic security and investment climate. Welcoming the upgrade, the Government said it remained committed to policies that promote inclusive and sustainable growth while maintaining fiscal prudence and macroeconomic stability.
Third upgrade in five months
India’s sovereign rating has now been raised three times in 2025: Morningstar DBRS upgraded the rating to BBB (Stable) in May, S&P Global followed in August with a move to BBB (Stable) from BBB- and R&I’s latest decision in September lifted it further to BBB+ (Stable).
