Virendra Pandit
New Delhi: A day after Prime Minister Narendra Modi congratulated the people of India for achieving a 7.8 per cent GDP growth in the first quarter of the current financial year, despite global gloom, the South Asian country on Wednesday got its first upgrade in 2026 as Japan Credit Rating Agency (JCRA) revised its rating to ‘A-’ from ’BBB+’.
It implies a high level of certainty to honour financial obligations, the media reported.
The development has taken place days after S&P Global retained India’s rating to ‘BBB’ for 2026. Last year, various agencies upgrading India’s rating included S&P Global, Morningstar DBRS and Ratings and Investment Information, Inc. (R&I).
This is the highest rating for India by any international agency so far, the media reported on Wednesday.
Giving the reasons for the upgrade, the agency said the Indian economy has maintained a high growth rate of around 7 per cent, supported by robust 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 GST, strengthening the country’s economic foundations as compared to the past,” it said.
It noted that the banking sector’s nonperforming loan ratio has declined to below 2 per cent, helped by the establishment of the Insolvency and Bankruptcy Code and the Reserve Bank of India’s (RBI) strengthened financial supervision and macroprudential policies. The financial foundation of the non-banking financial sector has also strengthened, contributing to a significant improvement in 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, CR has upgraded the Republic of India’s Foreign Currency and Local Currency Long-term Issuer Ratings by one notch to ‘A-‘“the agency said. It expects India to retain a high growth rate of over 6 per cent in current fiscal.
Though, the agency did highlight higher fiscal deficit (centre and state together) due to its federal structure and structural challenges still it maintained that the government has restrained growth in current expenditures including subsidies while placing greater emphasis on capital expenditure, particularly infrastructure investment, that helps raise the economy’s potential growth rate.
“The quality of fiscal expenditure has therefore improved. In FY2026, the central government reduced its fiscal deficit from 4.7 per cent of GDP in the previous fiscal year to 4.4 per cent while maintaining capital expenditure at a high level,” it said.
Though, it also highlighted that inflation has been rising since the beginning of 2026, reflecting higher food prices caused by unfavourable weather conditions and higher energy prices amid escalating tensions in the Middle East. Nevertheless, “the inflation rate has remained within the RBI’s target range,” it said.