JCR Upgrades India’s Sovereign Rating to ‘A-’
Japan Credit Rating Agency cites resilient growth, stronger finances and robust external position; outlook remains stable
GG News Bureau
New Delhi, 2nd Sept: The Japan Credit Rating Agency (JCR) has upgraded India’s long-term foreign currency and local currency issuer ratings by one notch from ‘BBB+’ to ‘A-’, while maintaining a Stable Outlook, the Government of India said on Wednesday.
The upgrade reflects India’s sustained economic growth, economic policies aimed at strengthening the foundations for growth and improvements in the financial system, according to JCR.
The agency noted that India has maintained a high growth rate supported by private consumption and public investment. Real GDP growth stood at 7.8 per cent in FY26, according to the latest estimates cited by the government. Growth remained at 7.8 per cent in the first quarter of FY27 despite global headwinds.
JCR also highlighted policy measures supporting productivity and economic development, including digital public infrastructure and implementation of the Goods and Services Tax (GST).
Fiscal position and financial system strengthen
The rating agency recognised improvements in the quality of fiscal expenditure, particularly the greater emphasis on capital expenditure and infrastructure investment.
It noted that the Central Government’s fiscal deficit declined from 4.7 per cent in FY25 to 4.4 per cent in FY26, while capital expenditure remained high.
JCR also pointed to improvements in the soundness of India’s financial system. Banking-sector asset quality has strengthened, supported by the Insolvency and Bankruptcy Code, government capital infusion and enhanced supervision by the Reserve Bank of India.
The agency said capital adequacy and profitability in the banking sector remained sound, while asset quality and capital adequacy in the non-banking financial sector also improved.
Strong external position supports rating
On the external sector, JCR said India’s current account deficit remained contained, supported by a surplus in services.
The agency also highlighted India’s foreign exchange reserves, which significantly exceed short-term external debt, providing resilience against external shocks.
The government said the upgrade comes amid a challenging global environment and reflects the continued strengthening of India’s economic fundamentals through sustained growth, improved fiscal quality, effective economic policies and a stronger financial system.
India had also received sovereign rating upgrades from other major agencies in recent years. Morningstar DBRS upgraded India’s sovereign rating in May 2025, followed by S&P Global Ratings in August 2025 and Japan-based Rating and Investment Information, Inc. (R&I) in September 2025.
