Japanese credit rating agency JCR has upgraded India’s sovereign credit rating to ‘A-‘ with a stable outlook, citing a high growth rate of around 7 per cent. In a statement issued on September 2, 2026, JCR said it upgraded India’s Foreign Currency Long-term Issuer Rating from BBB+ to A-. Similarly, the Local Currency Long-term Issuer Rating was also upgraded from BBB+ to A-, with a stable outlook. Furthermore, the agency raised India’s country ceiling by one notch to A. The agency stated that this is an unsolicited rating, meaning it was issued without a request from the Indian government.
Strong growth and an improving banking sector
In its report, JCR stated that the Indian economy has maintained a high growth rate of around 7 per cent, driven by strong private consumption and public investment. 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.
Meanwhile, the banking sector’s non-performing loan ratio has also declined to below 2 per cent.
How big and how fast is India’s economy?
According to the report, India’s population exceeds 1.4 billion, and the country’s nominal GDP is USD 3.9 trillion. Private consumption remained strong in fiscal year 2026, supported by reductions in personal income tax and lower GST rates. Real GDP growth during this period was recorded at 7.7 per cent. The agency estimates that the economy could maintain a high growth rate of over 6 per cent in fiscal year 2027.
Although inflation has increased since the beginning of 2026, driven by food prices boosted by adverse weather conditions and higher energy prices amid rising tensions in the Middle East, inflation has remained within the RBI’s target range.
JCR’s opinion on fiscal deficit
JCR believes that India, as a democratic federal nation, faces certain structural challenges that contribute to the persistence of high fiscal deficits. These include complex intergovernmental fiscal relations, fiscal transfer arrangements designed to reduce inequality between states, and fiscal management being influenced by electoral cycles.
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