Japan’s Credit Rating Agency has upgraded India’s sovereign rating to A-, recognising the country’s strong growth, fiscal reforms, and resilient financial system, marking its return to the A category after over three decades.
Japan’s Credit Rating Agency has lifted India’s sovereign rating to A- from BBB+, keeping the outlook stable and restoring the country to the A category after more than 35 years. The move, announced on Wednesday, came days after India’s statistics office reported better-than-expected growth, underlining how strong output and improving fiscal indicators have strengthened the case for the upgrade.
According to JCR, the decision reflects India’s sustained economic expansion, better public finances and a more resilient financial system. The agency pointed to robust private consumption, continued public investment and policy changes such as the goods and services tax and the expansion of digital public infrastructure. It also said India’s banking sector has improved markedly, helped by the Insolvency and Bankruptcy Code, government capital support and tighter oversight from the Reserve Bank of India.
The timing of the upgrade also follows a string of positive assessments from other rating firms. S&P Global Ratings and Fitch kept India in investment-grade territory last month, while Morningstar DBRS, S&P and Japan’s Rating and Investment Information Inc. have all raised India’s ratings over the past year. Former 15th Finance Commission chairman N.K. Singh said the return to the A band after more than three decades was recognition of India’s growth momentum, macroeconomic stability and structural reforms.
JCR said India’s economy has been growing at about 7%, supported by strong household spending and government-led investment, and expects growth of more than 6% in the current fiscal year. It also said the central government has been improving the quality of spending by restraining current outlays, including subsidies, while giving more weight to infrastructure. The agency noted that India’s external position remains comfortable, with foreign-exchange reserves ample relative to short-term external debt, although it flagged structural risks including a still-high fiscal deficit and sensitivity around election-related spending.
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