Japanese Credit Rating Agency Upgrades Sovereign Credit Rating of India to ‘A-’ from ‘BBB+’

Japanese Credit Rating Agency Upgrades Sovereign Credit Rating of India to ‘A-’ from ‘BBB+’

New Delhi, Sep 2 [VoM News]: Japanese Credit Rating Agency (JCRA) on Wednesday revised India’s sovereign credit rating by one notch to ‘A-’ from ‘BBB+’, citing strong growth prospects, a well-functioning fiscal framework and financial sector reforms and development of public infrastructure, among other factors.

In a statement, JCRA said India has managed high growth on a sustainable basis, approximately of 7%, with growth underpinned by robust private consumption and ongoing public investment.

According to JCRA, India’s infrastructure, which has been benefiting from continuous public spending, is improving and it has also developed the public digital infrastructure, the GST (Goods and Services Tax) system, creating foundations for higher growth and productivity.

JCRA also added that India’s financial system has developed as well with its gross non-performing loan (GNPL) ratio improving to 1.8% at the end of FY26 from 4.8% at the end ofFY20 as the credit risk to assets moderated due to strong credit growth, restructuring by Indian banks, government capital support and enhanced regulatory supervision by RBI (Reserve Bank of India) underpinned by the Bankruptcy Law.

It revised India’s foreign-currency and local-currency long-term issuer ratings to ‘A-’ and the country ceiling to ‘A’.

JCRA further stated that India’s economy expanded by 7.7% in FY26, with a strong personal consumption supported by personal income tax cuts and a reduction in the GST rate. It expects an economy that grows above 6% in FY27.

Commenting on Inflation, JCRA said price pressure has increased, however this is mainly due to rises in prices of food and energy driven by adverse weather and escalating tensions in the Middle East while India’s inflation remains within the RBI target.

Commenting on India’s fiscal health JCRA further added that the country’s deficit financing measures have seen continued improvement from 4.7% in the last fiscal year to 4.4% of GDP for FY26 while capital expenditures remain at a relatively high level.

Adding further JCRA said that India possesses ample international reserves that largely exceed the amount of its short-term liabilities abroad which will protect the country from externally generated shocks.