“India’s rating reflects strengths from a robust growth outlook compared with peers and resilient external finances, which have supported India in navigating the large external shocks over the past year,” Fitch Ratings said.

However, these are offset by India’s weak public finances, illustrated by high deficits and debt relative to peers, as well as lagging structural indicators, including World Bank governance indicators and GDP per capita, it added.

The agency has kept India’s credit rating unchanged at ‘BBB-‘ — the lowest investment grade rating — since August 2006. Fitch Ratings forecast India to be one of the fastest-growing rated sovereigns globally at 6 per cent in the current fiscal year ending March 2024 supported by resilient investment prospects.

“Still, headwinds from elevated inflation, high interest rates and subdued global demand, along with fading pandemic-induced pent-up demand, will slow growth from our FY23 estimate of 7 per cent before rebounding to 6.7 per cent by FY25,” the global rating agency said.

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