Policymakers can draw some cold comfort from Fitch’s latest commentary accompanying its credit-rating review. While it left India’s rating unchanged at BBB minus, Fitch sees resilience in some economic health metrics despite external-front uncertainties.
It forecasts GDP growth at 6.4% in 2026-27, about three times the average for countries rated likewise, and puts inflation around the central bank’s target of 4%, while it notes that the country’s external balances are strong.
These are no mean achievements as the world reels under a global supply shock. But India’s debt at 84.4% of GDP (2025-26 data) is significantly higher than the 57% median for peer countries.
Little of it is externally owed and faster growth than the rate of interest payable keeps India out of debt danger, but that ratio has been held up as a risk by various rating agencies.
Yet, S&P Global Ratings lifted India’s rating last year to BBB. More upgrades should follow if India’s fiscal compression proceeds along its projected path.
Together with inflation control, that would help lower the cost of available capital for investment. With a fiscal pullback now explicitly linked by policy to a debt target, slippages mustn’t happen.
