The sovereign rating upgrade by global agency Moody's has put India alongside Italy, Spain, Bulgaria and the Philippines in terms of investment climate.


In effect, India has become the largest economy among Baa2-rated sovereigns, according to Moody's. The agency today upgraded India's sovereign credit rating by a notch to 'Baa2' with stable outlook after a gap of 13 years, saying reforms will foster sustainable growth.


Sovereign rating is issued to national governments and a barometer of the country's investment climate. It gives investors insight into the level of risks, including political, associated with investing in a particular country.


According to Moody's, Baa rating is medium-grade and subject to moderate credit risk while the modifier 2 indicates a mid-range ranking. The government and some commentators in India have been pitching hard for a rating upgrade citing the country's strong economic fundamentals, political stability and a slew of reforms.


Some of the key reforms that the Narendra Modi government has initiated include the Goods and Services Tax (GST), demonetisation, Aadhaar, bank recapitalisation, the Insolvency and Bankruptcy Code and targeted delivery of benefits through the Direct Benefit Transfer (DBT) system, among others. 
-- PTI