India secures third credit rating upgrade in FY26

India notched its third sovereign credit rating upgrade this fiscal year with Japan's Rating and Investment Information Inc. (R&I) raising the country’s long-term rating to BBB+ from BBB, with a ‘stable’ outlook.

- Rhik Kundu

The move follows similar upgrades by S&P Global in August and Morningstar DBRS in May, marking a rare streak of upgrades for a major emerging economy at a time of global uncertainty.

R&I’s rating upgrade for India on Friday comes as the economy navigates tariff wars in a volatile world. A stronger credit rating enhances India’s standing in global capital markets, paving the way for cheaper and more predictable access to funds for both the government and private sector.

For nearly two decades, India’s sovereign debt was at the lowest investment grade of BBBat S&P. It has risen above the threshold now. This year, Morningstar DBRS upgraded India’s rating to BBB from BBB (low).

To be sure, economists and policymakers have long pressed for a higher rating, citing India’s strong fundamentals and sustained efforts at fiscal consolidation.

R&I highlighted buoyant tax revenues, fiscal discipline, and resilient domestic demand as reasons for India’s sovereign debt ratings upgrade.