Fitch affirms India’s sovereign rating at ‘BBB-’ on robust growth, solid external finances

On Monday (August 25, 2025), Fitch Ratings confirmed India’s sovereign rating in ‘BBB-‘, with a stable approach, said that a strong record of growing development and improving fiscal credibility would improve structural matrix.

“India’s ratings are supported by its strong growth and solid external finance,” said Fitch, as it estimates a GDP growth of 6.5% in the financial year ending March 2026 (FY 26), which is unchanged from FY25, and is above the ‘BBB’ medium of 2.5%.

It said that India’s economic approach remains strong relative to peers, even in the last two years speed has been conducted.

Fitch said, “The proposed goods and service tax (GST) improvement, if adopted, would support some of these growth risks, supporting consumption,” Fitch said.

The Center has proposed a 2-level rate structure of 5 and 18% for ‘merit’ and ‘standard’ goods and services at the GST rate at a rate structure at a rate structure and about 5-7 items. The proposal forces the current to remove with 12 and 28% tax slab.

Fitch said in a statement, “A strong record should make a stable improvement in its structural matrix on giving growth with macro stability and improving fiscal reliability, including GDP per capita, and increases the possibility that the loan can move downwards in the medium period.”

However, Fitch flagged off the fiscal matrix as a credit weakness, with high deficit and debt than ‘BBB’ peers.

“Lagging in structural matrix, including governance indicators and GDP per capita, also obstruct ratings,” Fitch said.

On August 14, S&P Global Rating upgraded India’s sovereign rating from ‘BBB’ to ‘BBB’ from ‘BBB’, with a stable approach-its first upgrade to India in 18 years.