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 the Stable Outlook. JCR has also raised India’s country ceiling by one notch to ‘A’. Finance Ministry said that the upgrade reflects India’s solid economic growth, the effectiveness of economic policies in strengthening the foundations for growth, and the improved soundness of the financial system. The Ministry said that 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.

In a statement, JCR noted that the Indian economy has maintained a high growth rate, supported by robust private consumption and public investment. The agency also highlighted the Indian Government’s continued implementation of policies including the development of digital public infrastructure and implementation of the Goods and Services Tax, which have strengthened India’s economic foundations. The agency also recognised the improvement in the quality of fiscal expenditure, with greater emphasis on capital expenditure, particularly infrastructure investment. JCR noted that the Central Government’s fiscal deficit declined from 4.7 percent in Financial Year 25 to 4.4 percent in Financial Year 26, while capital expenditure remained high.