India Secures ‘BBB’ Rating with Stable Outlook from Morningstar DBRS

Current Context: Morningstar DBRS upgraded India’s sovereign credit rating to ‘BBB’ with a Stable Outlook on May 9, 2025.

Key Highlights:

• Previous Rating: BBB (Low), now upgraded to BBB.
• Reason for Upgrade: Structural reforms, fiscal consolidation, infrastructure investments, and digitalization.
• Economic Strength: India’s GDP growth averaged 8.2% (FY22–FY25), with inflation stabilizing within RBI’s target range.
• Banking Sector: Resilient financial system, with non-performing loans at a 13-year low of 2.5%.
• Debt Management: Public debt-to-GDP ratio at 80.2%, with a target to reduce central government debt to 50% by FY31.

Question:

Q.1 What is the new sovereign credit rating assigned to India by Morningstar DBRS as of May 9, 2025?
a) BBB (Low)
b) BB+
c) BBB
d) A–

Answer: c) Morningstar DBRS upgraded India’s sovereign credit rating from BBB (Low) to BBB with a Stable Outlook.