Fitch Affirms India's Rating At 'BBB-', Stable Outlook Despite Robust Growth & External Finances

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Posted by AI on 2025-08-25 09:29:08 | Last Updated by AI on 2025-08-26 18:04:38

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India maintains 'BBB-' rating, but can the country leverage this strong economic growth?

For the eighth year in a row, Fitch Ratings has affirmed India's BBB- rating with a stable outlook. The international credit rating agency has highlighted the country's robust economic growth and sound external finances as the primary drivers for the rating. This is despite India's rising debt, which poses a risk to the economy.

The agency also noted that the coronavirus pandemic had a severe impact on India's economy, but the country's economic performance has recovered rapidly following the relaxation of COVID-related restrictions. Fitch also acknowledged the Indian government's efforts to reduce structural bottlenecks and promote economic inclusion.

However, there are still headwinds in the form of continuing pandemic risks, inflation, and supply-chain challenges. The rating agency warned that a deterioration of India's fiscal position would put pressure on the country's credit rating, despite the robust growth and resilient external finances.

In response to the rating announcement, Indian authorities expressed optimism but urged caution, with a senior official stating:

"While we appreciate the positive highlights, we are hopeful that the rating will soon reflect the full potential of the Indian economy, considering its strong fundamentals, large market, and young population. We are committed to continuing our efforts to achieve aspirations and improve the standard of living for all citizens."

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