High Sustained Growth
“JCR has upgraded the Republic of India’s Foreign Currency and Local Currency Long-term Issuer Ratings by one notch to “A-.” JCR has also raised the country ceiling by one notch to “A.” the statement read.
In an official announcement made on Wednesday, the Tokyo-based agency indicated that the Indian economy has sustained a high growth rate of approximately 7%. The agency said that this came to pass as a result of robust private consumption and public investment.
JCRA also emphasised the advancements in the banking sector, noting that the gross non-performing loan ratio fell to 1.8% by the end of March 2026. The agency credited this improvement to the implementation of the Insolvency and Bankruptcy Code (IBC), government capital infusions, and enhanced oversight by the Reserve Bank of India (RBI).
The agency has upgraded India’s Foreign Currency and Local Currency Long-term Issuer Ratings by one notch to A-. Additionally, it has raised India’s country ceiling by one notch to A. JCRA pointed out that India has a population exceeding 1.4 billion and a nominal GDP of $3.9 trillion.
In FY2026, private consumption remained strong, aided by personal income tax reductions and lower GST rates, while the economy experienced a growth of 7.7% in real GDP terms. The agency anticipates that India will maintain a high growth rate of over 6% in FY2027.
It noted that inflation has been on the rise since the start of 2026, driven by increased food prices due to adverse weather conditions and higher energy costs amid escalating tensions in the Middle East. Nevertheless, inflation has stayed within the target range set by the RBI.
Fiscal Deficit In Focus
Simultaneously, it stated that the government has limited the growth of current expenditures, including subsidies, while focusing more on capital expenditure, especially in infrastructure investment. The agency remarked that the quality of fiscal expenditure has improved as a result.
In FY2026, the central government decreased its fiscal deficit from 4.7% of GDP in the prior fiscal year to 4.4%, all while sustaining a high level of capital expenditure.
Nevertheless, JCRA noted that the overall government debt, which encompasses state government debt, along with the related interest obligations, continues to be substantial.
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(Edited by : Juviraj Anchil)
First Published: Sept 2, 2026 1:12 PM IST
