India’s rating upgrade a challenge as debt woes trump fiscal prudence: Fitch

FPJ News Service mumbai

Despite the Indian government's efforts to consolidate its fiscal position, a sovereign rating upgrade appears challenging due to concerns over high public debt and interest payments, an analyst at Fitch Ratings said in an interview on Monday, Reuters reported.

"India's debt-to-GDP ratio is just above 80% on a general government basis, well above the high-50% range that we see for similar-rated peer countries," said Jeremy Zook, director of Asia sovereign ratings. "Those are more structural fiscal factors that are still a constraint for a rating upgrade."

In August, Fitch affirmed India's long-term foreign currency issuer rating at 'BBB-' with a stable outlook, citing a strong medium-term growth outlook. A rating upgrade is important as it can lower borrowing costs, attract foreign investment and boost economic credibility. As it moves away from targeting fiscal deficit, the government aims to lower its debt-to-GDP ratio to around 50% by March 2031.