NEW DELHI, Sep 2: 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-‘. The agency has also maintained a Stable Outlook and raised India’s country ceiling to ‘A’. The Indian Ministry of Finance has welcomed the upgrade, citing it as a testament to the country’s robust economic performance and effective policy implementation.
Information was available with The Chenab Times indicating that the upgrade reflects India’s solid economic growth trajectory, the success of economic policies in solidifying growth foundations, and a strengthened financial system. JCR noted that the Indian economy has consistently maintained a high growth rate, propelled by strong private consumption and significant public investment. Official estimates from the Ministry of Statistics and Programme Implementation (MoSPI) show that real GDP growth stood at 7.8 per cent in the fiscal year 2025-26. This growth momentum continued into the first quarter of fiscal year 2026-27, with real GDP expanding by 7.8 per cent, even amidst prevailing global economic headwinds.
The rating agency specifically acknowledged the government’s ongoing commitment to policies that foster productivity growth and economic development. Key initiatives such as the development of digital public infrastructure and the implementation of the Goods and Services Tax (GST) were highlighted as crucial factors that have reinforced India’s economic foundations. JCR also recognized an improvement in the quality of fiscal expenditure, with a notable increase in capital expenditure, particularly in infrastructure development. The agency reported that the Central Government’s fiscal deficit decreased from 4.7% in FY25 to 4.4% in FY26, while capital expenditure levels remained robust.
Furthermore, JCR pointed to a significant enhancement in the overall soundness of India’s financial system. The asset quality within the banking sector has seen considerable improvement, supported by the establishment of the Insolvency and Bankruptcy Code (IBC), strategic capital infusions by the government, and reinforced supervisory oversight by the Reserve Bank of India (RBI). Both capital adequacy and profitability within the banking sector have been reported as sound. The financial system’s stability is further bolstered by improvements in the asset quality and capital adequacy of the non-banking financial sector.
Regarding the external sector, JCR observed that India’s current account deficit has remained contained, largely due to a surplus in the services balance. The country’s substantial foreign exchange reserves, which significantly exceed its short-term external debt obligations, provide a strong buffer against external shocks. This upgrade arrives in a challenging global economic climate, underscoring the continuous strengthening of India’s economic fundamentals, supported by sustained growth, effective economic strategies, enhanced fiscal management, and a more resilient financial system.
This development follows a series of sovereign rating upgrades India has received from major international rating agencies in the past year. Morningstar DBRS upgraded India’s sovereign rating in May 2025, followed by S&P Global Ratings in August 2025 and Rating and Investment Information, Inc. (R&I), Japan, in September 2025.
The Chenab Times News Desk