Finance Ministry says the upgrade comes against the backdrop of a challenging global environment and underscores the continued strengthening of India’s economic fundamental
| Photo Credit: The Hindu
The Japan Credit Rating Agency (JCR) has upgraded India’s credit rating by one notch from BBB+’ to ‘A-, it announced on Wednesday, on the back of India’s relatively high growth, the government’s growth-oriented policies, and the improved strength of the financial system.
The Ministry of Finance has issued a statement welcoming the development, saying that this comes against the backdrop of a challenging global environment.
A higher rating means that India can borrow at lower costs in the future, leading to a lower interest burden on the exchequer.
Robust growth, strong policies
“The Indian economy has maintained a high growth rate of around 7%, supported by robust private consumption and public investment,” JCR said in its rationale for the ratings upgrade.
“The government of India has steadily implemented policies conducive to productivity growth and economic development, including the development of digital public infrastructure and the implementation of the goods and services tax (GST), strengthening the country’s economic foundations as compared to the past,” it added.
Improved financial sector
The ratings agency further took note of the fact that the banking sector’s non-performing asset ratio has fallen to below 2%, which it said was helped by the Insolvency and Bankruptcy Code and the Reserve Bank of India’s (RBI) strengthened financial supervision and macroprudential policies.
It added that the financial foundation of the non-banking financial sector has also strengthened, which was a significant contributor to the soundness of the financial system in recent years.
“Considering India’s solid economic growth, the effectiveness of economic policies that strengthen the foundations for growth, and the improved soundness of the financial system, JCR has upgraded the Republic of India’s Foreign Currency and Local Currency Long-term Issuer Ratings by one notch to ‘A-’,” the ratings agency said.
JCR has also raised the country ceiling by one notch to “A”.
Not the first upgrade
“The upgrade comes against the backdrop of a challenging global environment and underscores the continued strengthening of India’s economic fundamentals, supported by sustained growth, effective economic policies, improved fiscal quality and a stronger financial system,” the Ministry of Finance said in a statement following the ratings upgrade.
“It is worth noting that India had previously received sovereign rating upgrades from major international rating agencies over the past year,” it added. “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.”
Published – September 02, 2026 07:18 pm IST
