Fitch affirmed India’s rating at BBB-

Fitch Ratings on Monday affirmed India’s sovereign rating at ‘BBB-’. The outlook is stable.

“India’s ratings are supported by its robust growth and solid external finances. A strengthening record on delivering growth with macro stability and improving fiscal credibility should drive a steady improvement in its structural metrics, including GDP per capita, and increase the likelihood that debt can trend modestly downward in the medium term,” the agency said.

However, fiscal metrics are a credit weakness, with high deficits, debt and debt service compared with ‘BBB’ peers. Lagging structural metrics, including governance indicators and GDP per capita, also constrain the rating.

The agency said ghat India’s economic outlook remains strong relative to peers, even as momentum has moderated in the past two years. We forecast GDP growth of 6.5% in the fiscal year ending March 2026 (FY26), unchanged from FY25, and well above the ‘BBB’ median of 2.5%.

“Domestic demand will remain solid, underpinned by the ongoing public capex drive and steady private consumption. However, private investment is likely to remain moderate, particularly given heightened US tariff risks,” it said.

There has been a notable slowdown in nominal GDP growth, which we forecast to expand 9.0% in FY26, from 9.8% in FY25 and 12.0% in FY24, the agency added.

Published on August 25, 2025