Fitch Flags Downside Risk to India's Rating

INDIA'S PACE OF debt reduction is gradual, leaving room for downside risk to sovereign rating in the eventuality of a significant economic shock, Fitch Ratings said on Monday.

- FE BUREAU

The government provided greater clarity on its medium-term fiscal strategy in the Budget for 2025-26. The government will aim to manage fiscal deficits so as to keep central government debt on a gradual downward trend to 50% (+/- 1%) of the GDP by FY31, roughly 7% of the GDP lower than FY25. Such a path would require fiscal deficits to be sustained at or just below the 4.4% of the GDP deficit target in FY26 and is highly dependent on nominal GDP growth outcomes, Fitch said.