Moody's ups India's rating by a notch; here is how to read what it means

A sovereign credit rating is the measure of risk associated while investing in a particular country. A look at what each of the 10 ratings imply

Moody’s Investors Service on Friday upgraded India’s sovereign rating by a notch to Baa3 from Baa2. What does this really imply? And how big a good news is this for the country? Simply put, sovereign credit rating is the measure of risk associated while investing in a particular country. A higher rating is not only a reflection of economic and political stability in a country but is also helpful in garnering more foreign direct investment (FDI) and funds from the international bond markets. The Moody's upgrade of India to Baa2 indicates a mid-range ranking in this category, up from the lower end of the generic category that the country has been in for the past 14 years.

Refer to the table below to understand what the various credit ratings mean and assess the change in India's status on the ranking: