New Delhi: 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.
JCR has also raised India’s country ceiling by one notch to ‘A’. The Indian government welcomed the rating upgrade, describing it as recognition of the country’s strengthening economic fundamentals, according to an official statement.
The upgrade reflects India’s strong economic growth, effective economic policies and an improving financial system, according to JCR.
The agency noted that India has maintained a high growth rate, supported by robust private consumption and public investment. Real GDP growth stood at 7.8% in FY26, according to the latest estimates released by the Ministry of Statistics and Programme Implementation.
India also maintained a real GDP growth rate of 7.8% in the first quarter of FY27 despite global economic headwinds.
JCR highlighted the government’s policies to support productivity and long-term economic development. These include developing digital public infrastructure and implementing the Goods and Services Tax.
The rating agency also recognised improvements in the quality of government expenditure, particularly the continued focus on capital expenditure and infrastructure investment.
India’s central government fiscal deficit declined from 4.7% of GDP in FY25 to 4.4% in FY26, while capital expenditure remained at a high level.
JCR said these developments have contributed to strengthening the foundations of India’s economic growth.
The agency also pointed to a significant improvement in the overall soundness of India’s financial system.
The asset quality of the banking sector has improved, supported by measures including the Insolvency and Bankruptcy Code, government capital infusion and stronger supervision by the Reserve Bank of India.
Banking sector capital adequacy and profitability have also remained sound. JCR noted that asset quality and capital adequacy in the non-banking financial sector have improved as well.
JCR said India’s current account deficit remains contained, supported by a surplus in the services balance.
The agency also highlighted India’s foreign exchange reserves, which remain significantly higher than short-term external debt. This provides the country with resilience against external economic and financial shocks.
The latest upgrade comes amid a challenging global economic environment. It reflects the continued strengthening of India’s economic fundamentals, supported by sustained growth, fiscal improvements, effective policies and a stronger financial system.
India has also received sovereign rating upgrades from other international 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’s Rating and Investment Information, Inc. in September 2025.
