UPSC Prelims Practice Questions — India’s Sovereign Credit Rating upgraded to 'A-' with Stable Outlook by Japan Credit Rating Agency
Q1. With reference to India's institutional engagement with the international agencies that assign it a sovereign credit rating, which one of the following statements is correct?
- A. The Reserve Bank of India is the sole authority statutorily empowered to negotiate India's sovereign rating with every foreign rating agency
- B. NITI Aayog, as the apex policy think-tank of the Government of India, exclusively coordinates all sovereign rating reviews of the country
- C. The Department of Economic Affairs of the Ministry of Finance is the nodal body that engages with the international agencies rating India
- D. Every international agency rating India must first be registered with the Securities and Exchange Board of India as a credit rating agency
Q2. How many international Sovereign Credit Rating Agencies presently assign a sovereign credit rating to India?
- A. Three
- B. Four
- C. Five
- D. Six
Q3. Consider the following statements regarding sovereign rating actions taken on India during the calendar year 2025:
1. Morningstar DBRS raised India's long-term foreign and local currency issuer ratings from BBB (low) to BBB with a Stable trend in May 2025.
2. S&P Global Ratings raised India's long-term sovereign credit rating from BBB- to BBB in August 2025.
3. Rating and Investment Information, Inc. (R&I) raised India's long-term sovereign credit rating from BBB to BBB+ in September 2025, retaining a Stable outlook.
4. Moody's Investors Service raised India's issuer rating from Baa3 to Baa2 in December 2025, this being the fourth upgrade of that year.
Which of the statements given above is/are correct?
- Morningstar DBRS raised India's long-term foreign and local currency issuer ratings from BBB (low) to BBB with a Stable trend in May 2025.
- S&P Global Ratings raised India's long-term sovereign credit rating from BBB- to BBB in August 2025.
- Rating and Investment Information, Inc. (R&I) raised India's long-term sovereign credit rating from BBB to BBB+ in September 2025, retaining a Stable outlook.
- Moody's Investors Service raised India's issuer rating from Baa3 to Baa2 in December 2025, this being the fourth upgrade of that year.
- A. 1 and 2 only
- B. 1, 2 and 3 only
- C. 2, 3 and 4 only
- D. 1, 3 and 4 only
Q4. With reference to the sovereign credit rating upgrades received by India during the calendar year 2025, consider the following agency-action pairs:
1. Morningstar DBRS — upgrade to 'BBB' with a Stable trend
2. S&P Global Ratings — upgrade to 'BBB' with a Stable outlook
3. Fitch Ratings — upgrade to 'BBB+' with a Stable outlook
4. Rating and Investment Information, Inc. (R&I) — upgrade to 'BBB+' with a Stable outlook
Which of the above is/are NOT correctly matched?
- Morningstar DBRS — upgrade to 'BBB' with a Stable trend
- S&P Global Ratings — upgrade to 'BBB' with a Stable outlook
- Fitch Ratings — upgrade to 'BBB+' with a Stable outlook
- Rating and Investment Information, Inc. (R&I) — upgrade to 'BBB+' with a Stable outlook
- A. 1 and 2
- B. 2 and 4
- C. 3 and 4
- D. 3 only
Q5. Consider the following statements regarding the actions of the two Japan-based agencies that rate India's sovereign debt:
1. Rating and Investment Information, Inc. (R&I) placed India at 'BBB+' with a Stable outlook, moving it up from 'BBB'.
2. Japan Credit Rating Agency (JCR) moved India from 'BBB+' to 'A-' with a Stable outlook and simultaneously raised India's country ceiling by one rank.
3. The R&I action was the third sovereign rating upgrade received by India in 2025, whereas the JCR action came in a subsequent calendar year.
Which of the statements given above is/are correct?
- Rating and Investment Information, Inc. (R&I) placed India at 'BBB+' with a Stable outlook, moving it up from 'BBB'.
- Japan Credit Rating Agency (JCR) moved India from 'BBB+' to 'A-' with a Stable outlook and simultaneously raised India's country ceiling by one rank.
- The R&I action was the third sovereign rating upgrade received by India in 2025, whereas the JCR action came in a subsequent calendar year.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q6. Consider the following entities:
1. Morningstar DBRS
2. Japan Credit Rating Agency (JCR)
3. Rating and Investment Information, Inc. (R&I)
4. Nippon Export and Investment Insurance (NEXI)
Which of the above is/are correctly identified as international Sovereign Credit Rating Agencies that assign India a sovereign credit rating?
- Morningstar DBRS
- Japan Credit Rating Agency (JCR)
- Rating and Investment Information, Inc. (R&I)
- Nippon Export and Investment Insurance (NEXI)
- A. 1 and 3 only
- B. 2 and 4 only
- C. 1, 2 and 3 only
- D. 1, 2, 3 and 4
Q7. Consider the following statements about the long-term rating notations used by international sovereign credit rating agencies:
1. On the alphabetic scale used by agencies such as S&P and Fitch, 'A-' stands one notch above 'BBB+'.
2. 'BBB-' is the lowest rung of investment grade, its counterpart on the Moody's scale being 'Baa3'.
3. India's movement from 'BBB-' to 'A-' over the 2025-26 rating cycle amounted to a rise of two notches on that scale.
Which of the statements given above is/are correct?
- On the alphabetic scale used by agencies such as S&P and Fitch, 'A-' stands one notch above 'BBB+'.
- 'BBB-' is the lowest rung of investment grade, its counterpart on the Moody's scale being 'Baa3'.
- India's movement from 'BBB-' to 'A-' over the 2025-26 rating cycle amounted to a rise of two notches on that scale.
- A. 1 only
- B. 1 and 2 only
- C. 2 and 3 only
- D. 1, 2 and 3
Q8. Consider the following long-term rating notations:
1. BBB- on the S&P/Fitch scale
2. Baa3 on the Moody's scale
3. A- on the S&P/Fitch scale
4. BB+ on the S&P/Fitch scale
Which of the above is/are correctly identified as lying within the investment grade?
- BBB- on the S&P/Fitch scale
- Baa3 on the Moody's scale
- A- on the S&P/Fitch scale
- BB+ on the S&P/Fitch scale
- A. 1, 2 and 3 only
- B. 1 and 2 only
- C. 3 and 4 only
- D. 1, 2, 3 and 4
Q9. Following the 2026 rating action by the Japan Credit Rating Agency, the highest long-term sovereign rating held by India from any international rating agency is:
- A. BBB
- B. Baa2
- C. A-
- D. BBB+
Q10. India was placed in the 'A' rating category by an international sovereign credit rating agency for the first time in which year, and by which agency?
- A. 2017, by Moody's Investors Service
- B. 2025, by S&P Global Ratings
- C. 2025, by Rating and Investment Information, Inc. (R&I)
- D. 2026, by the Japan Credit Rating Agency
Q11. In upgrading India in May 2025, Morningstar DBRS cited the banking system's non-performing loans as standing at a low last recorded how many years earlier?
- A. 5 years
- B. 9 years
- C. 13 years
- D. 18 years
Q12. The official assessment that India's sovereign credit ratings do not capture its fundamentals, together with the call for rating methodology to be made more transparent and less subjective, was set out in which one of the following?
- A. The Report on Currency and Finance brought out by the Reserve Bank of India
- B. The Economic Survey laid before Parliament by the Ministry of Finance
- C. The Report of the FRBM Review Committee chaired by N. K. Singh
- D. The Financial Stability Report brought out by the Reserve Bank of India