“Fitch Ratings has affirmed India’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB-‘ with a Stable Outlook,” the agency said in a statement.
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, it said.
The agency forecast India to be one of the fastest-growing Fitch-rated sovereigns globally at 6% in the fiscal year ending March 2024 (FY24), supported by resilient investment prospects.
Strong growth potential is a key supporting factor for the sovereign rating. Growth prospects have brightened as the private sector appears poised for stronger investment growth following the improvement of corporate and bank balance sheets in the past few years, supported by the government’s infrastructure drive, it noted.
India’s large domestic market makes it an attractive destination for foreign firms, the agency said. However, it observed, it was unclear whether India will be able to realise sufficient reforms to allow the economy to benefit substantially from opportunities offered by the deeper integration in global manufacturing supply chains, including China+1 corporate strategies that encourage diversification in investment destinations. Service sector exports, however, are likely to remain a bright spot.