NEW DELHI: Global rating agency Fitch on Thursday affirmed India's sovereign rating at 'BBB-' with a stable outlook.
India's rating has remained unchanged at 'BBB-', the lowest investment grade, since August 2006.
"Fitch Ratings has affirmed India's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook," the global rating agency said in a statement.
India's ratings are underpinned by its strong medium-term growth outlook, which will continue to drive improvement in structural aspects of its credit profile, including India's share of GDP in the global economy, as well as its solid external finance position, it said in a statement.
Strengthening fiscal credibility from recent achievement of deficit targets, enhanced transparency and buoyant revenues, have increased the likelihood that government debt can follow a modest downward trend in the medium term, it said.
Nevertheless, it said, fiscal metrics remain a credit weakness, with deficits, debt and debt service burden all high compared to 'BBB' range peers.
Lagging structural metrics, including governance indicators and GDP per capita, also weigh on the rating, it added.
Observing that India is set to remain among the fastest-growing sovereigns globally, it said, "we forecast GDP growth of 7.2 per cent in the fiscal year ending March 2025 (FY25) and 6.5 per cent in FY26, down slightly from 8.2 per cent in FY24."
Public infrastructure capex remains a key growth driver and has improved spending quality, helping mitigate the drag from fiscal consolidation, it said, adding, private investment in real estate is likely to remain strong and there are signs of a nascent pick-up in manufacturing investment.