Fitch keeps India at BBB-, cites solid growth but flags fiscal strain from youth protests

Fitch Ratings confirmed India's sovereign credit rating at BBB- with a stable outlook, extending an unchanged stance at the lowest investment-grade level for two decades. The agency cited the economy's resilience amid the West Asian energy shock, forecasting 6.4% GDP growth for the current financial year, slightly below the recent three-year average. Fitch expects the country's external financing position to remain sound, with foreign-exchange reserves projected to hit $733 billion by FY27.

Nonetheless, it warned that recent youth protests sparked by a leaked medical entrance exam could compel the government to raise fiscal outlays for education and employment programs, creating budgetary pressure. The rating outlook also noted India's reliance on imported crude oil, with about 87% of demand met by imports, and the lingering risk from the US-Iran conflict affecting the Strait of Hormuz. Overall, the agency sees structural credit indicators improving over time, though near-term challenges persist.