Japan Credit Rating Agency Upgrades India's Sovereign Rating to A- with Stable Outlook
The Government of India welcomed Japan Credit Rating Agency's (JCR) decision to upgrade India's Long-Term Foreign Currency and Local Currency Issuer Ratings by one notch from 'BBB+' to 'A-', while maintaining a Stable Outlook. JCR simultaneously raised India's country ceiling by one notch to 'A'. This upgrade reflects India's solid economic growth, effective economic policies strengthening growth foundations, and improved financial system soundness.
JCR noted that the Indian economy has maintained high growth rates supported by robust private consumption and public investment. According to Ministry of Statistics and Programme Implementation data, real GDP growth remained strong at 7.8% in FY26, with growth momentum sustained in Q1 FY27 at 7.8% despite global headwinds. The agency highlighted the government's continued implementation of productivity-enhancing policies including digital public infrastructure development and Goods and Services Tax implementation, which have strengthened India's economic foundations.
The upgrade recognized significant improvement in fiscal expenditure quality, with greater emphasis on capital expenditure particularly in infrastructure investment. JCR noted the Central Government's fiscal deficit declined from 4.7% in FY25 to 4.4% in FY26 while maintaining high capital expenditure levels.
JCR highlighted substantial improvement in India's financial system soundness, with banking sector asset quality strengthening supported by the Insolvency and Bankruptcy Code establishment, government capital infusion, and strengthened RBI supervision. Banking sector capital adequacy and profitability remained sound, while non-banking financial sector asset quality and capital adequacy also improved.
On external sector performance, JCR noted India's current account deficit remains contained supported by services balance surplus, with ample foreign exchange reserves significantly exceeding short-term external debt providing strong resilience against external shocks.
This upgrade follows previous sovereign rating upgrades from major international agencies: Morningstar DBRS in May 2025, S&P Global Ratings in August 2025, and Rating and Investment Information, Inc. (R&I) Japan in September 2025.