Strengthening Trust Worldwide, Japan Boosts India's International Credit Ranking to BBB
India has received another significant boost to its economic standing as Rating and Investment Information, Inc. (R&I) of Japan has upgraded the country's long-term sovereign credit rating to 'BBB+' from 'BBB'. This upgrade comes on the heels of similar upgrades by S&P and Morningstar DBRS earlier in the year.
The upgrade is a testament to India's status as one of the largest and fastest-growing economies globally. R&I cites several key factors driving India's economic resilience, including its demographic dividend, robust domestic demand, and sound government policies.
The Government of India has welcomed this development and reaffirmed its commitment to sustaining high-quality, inclusive growth. The administration's policies include enhancing infrastructure, reducing dependence on energy imports, and improving the business environment through legal reforms. The government remains dedicated to maintaining macroeconomic stability and building on this momentum with policies that promote economic security and long-term fiscal health.
R&I's assessment also lauds India's fiscal consolidation efforts, driven by rising tax revenues and the rationalization of subsidies. These efforts have contributed to manageable debt levels and strong growth in India. The agency has maintained a "Stable" outlook for the Indian economy.
While there are risks, such as 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 further praises Prime Minister Narendra Modi's administration for policies aimed at attracting foreign manufacturers.
This is the third upgrade India has received in just five months, underscoring the increasing global recognition of India's economic resilience. These upgrades reflect a growing global confidence in India's medium-term growth prospects amid ongoing global uncertainties. India's external stability has been strengthened, as reflected in a modest current account deficit, stable surpluses in services and remittances, and a low external debt-to-GDP ratio. The country's foreign exchange reserves have bolstered confidence in its financial stability.
These developments underscore India's commitment to a strong and stable economy, and bode well for its continued growth and development in the years to come.
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