Fitch Affirms India’s Rating At ‘BBB-’ With Stable Outlook For 13th Year In A Row
A worker unloads reinforcing steel from a truck at the excavation site of a launching shaft for Metro Line 3, in the Dharavi area of Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Fitch Affirms India’s Rating At ‘BBB-’ With Stable Outlook For 13th Year In A Row


Fitch retained India's sovereign rating at 'BBB-', the lowest investment grade, with stable outlook, saying a weak fiscal position continues to constrain its rating.

This is the 13th year in a row that global rating agency has rated India at 'BBB-'. It had last upgraded India's sovereign rating from 'BB+' to 'BBB-' with a stable outlook on Aug. 1, 2006.

"India's ratings balance a strong medium-term growth outlook and relative external resilience stemming from strong foreign reserve buffers, against high public debt, a weak financial sector and some lagging structural factors," Fitch said in a statement.

It said a robust growth outlook continues to support India's credit profile. Fitch expects growth of 6.8 percent in the current fiscal and 7.1 percent in the next, supported by accommodative monetary policy, easing of bank regulations, and government spending.

"A weak fiscal position continues to constrain India's sovereign ratings. In this regard, the next government's medium-term fiscal policy will be of particular importance from a rating perspective," Fitch said while affirming the country's long-term foreign-currency Issuer Default Rating at 'BBB-' with a stable outlook.

The general election, to be carried out from April 11 to May 19, will result in some temporary uncertainty about the policy agenda, it said, adding over the past 30 years, governments of different political persuasions have been generally reform-minded.

Also read: Fitch Pares India’s Growth Forecast Amidst Global Downturn

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