Japan Credit Rating Agency upgrades India’s sovereign rating to A- citing strong growth

The Japan Credit Rating Agency (JCRA) raised India's sovereign rating from BBB+ to A- on Wednesday, citing strong growth and a sound financial system. This is the second upgrade by a Japanese rating agency in recent times, following an upgrade from BBB to BBB+ by Rating and Investment Information Inc. (R&I) in September 2025. India's growth has been supported by robust private consumption and public investment, maintaining a high growth rate of around 7%.

Despite global headwinds, the economy grew by 7.8% in Q1 of FY27. However, the JCRA noted structural challenges on the fiscal front, including complex intergovernmental fiscal relations, fiscal transfer arrangements, and management susceptible to electoral cycles. India's foreign currency and local currency long-term issuer ratings have been raised by one notch to "A-" and "A", respectively.

The last "A" rating was awarded by Moody's in 1988. Inflation has been rising in India due to higher food prices caused by unfavorable weather conditions and higher energy prices, but it has remained within the RBI's target range. The central government's debt-to-GDP ratio stands at 56.1% and is expected to decline gradually.