Moodys retains India ranking at Baa3, maintains steady outlook

Moody’s Ratings on Monday (September 29, 2025) affirmed India’s long-term native and foreign-currency issuer rankings and the local-currency senior unsecured ranking at Baa3 with a ‘Stable’ outlook on the again of sturdy financial development and sound exterior place.

The international ranking company additionally affirmed India’s different short-term local-currency ranking at P-3.

“The rating affirmation and stable outlook reflect our view that India’s prevailing credit strengths, including its large, fast-growing economy, sound external position, and stable domestic financing base for ongoing fiscal deficits will be sustained,” it stated in a press release.

These strengths lend resilience to hostile exterior traits, particularly as excessive US (Aa1 steady) tariffs and different worldwide coverage measures hinder India’s capability to draw manufacturing funding, it stated.

India’s credit score power is balanced by long-standing weaknesses on the fiscal facet, which can stay, it stated.

Strong GDP development and gradual fiscal consolidation will result in solely a really gradual decline within the authorities’s excessive debt burden, and won’t be ample to materially enhance weak debt affordability, particularly as current fiscal measures to strengthen personal consumption erode the federal government’s income base, it stated.

India’s long-term local-currency (LC) bond ceiling stays unchanged at A2 and its long-term foreign-currency (FC) bond ceiling stays unchanged at A3, it stated.

“The four-notch gap between the LC ceiling and issuer rating reflects modest external imbalances as represented by persistent, albeit narrow, current account deficits; a relatively large government footprint in the economy; and moderate predictability and reliability of government policies,” it stated.

The one-notch hole between the LC and FC ceiling displays restricted exterior indebtedness and the low chance of a debt moratorium, particularly within the context of current steps in direction of liberalisation of non-resident portfolio funding, it stated.

On August 14, S&P Global Ratings upgraded India’s sovereign ranking by a notch to ‘BBB’, from ‘BBB-‘, with a steady outlook — its first improve for India in over 18 years.