When someone wants to invest his money, he needs to be ensured about the safety and return of his investment. For that he needs to know for sure that the place or organisation or business he wants to invest has the parameters favourable for his investment and he can get the capital and return on that without default.
However when the investment is going to be another country, the risks are more because of different legal framework, business climate, economic and financial status of the country, its political stability and its integrity in keeping with financial deadlines and international commitments. The established international rating agencies monitor all these happening in every country. They get, dissect and analyse and predict from them what will be happening in the short term and long term economic and political climate in that country. They ate these countries in a scale of investment safety .
There are various nodes in the rating scale each indicating a separate level of safety grade. The lowest is C denoting"typically in default, little prospect for recovery of principal or interest"
In the present case, India is assigned a rating Baa2, elevated from Baa3. That denotes the second of the three sub levels in the "Investment Grade, medium grade".
This will indicate to the large foreign investors that investments in India are safe and is positively increasing. That will encourage more foreign investments in India. Capital investments will increase development, employment and productivity, resulting in the economic growth. However there should be some alert and vigilance to se that the capital inflow is not used to siphon off profits and erode our economy by artificial growth by involving in speculation and non-productive ventures. That is where the will power, vision and determination of the government is tested.