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- Us tarifs will have minor impact on India’s economy: fits affirms India’s bbb credit rating with stable outlook
New Delhi2 minutes ago
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India will apply to India from 27 August.
Global rating agency Fitch believes that American tariff will have a slight impact on India’s economy. According to the report, it can also be reduced in the end. Fitch has retained India’s credit rating on BBB–.
India’s strong economic development and stable economy has supported this rating. The rating agency has estimated India’s GDP rate to be 6.5% in the financial year 2026 (FY26), which is similar to FY25.
However, Fitch has also reported that India’s growing fiscal deficit and government debt pressure is the cause of credit weekness.
- BBB- What is: The lowest “investment grade” rating. This means that the ability to repay the debt is fine, but there may be a slight risk in economic problems. Investment safe, limited trust.
- What is bbb: These BBB-one step above. The ability to repay the debt good, reduce the risk, and the trust of investors is slightly higher.
A minor impact of America’s tariff
The rating agency has stated that the exports to the US have only 2% share in India’s GDP, so the direct effect of these tariffs will be modest. However, uncertainty on tariffs will have a negative impact on investment.
Fitch believes that Trump plans to impose 50% tariff on India by 27 August, but will finally be reduced.
S&P Global increased India’s credit rating
Global rating agency S&P Global has increased India’s long-term credit rating from BBB-to BBB. At the same time, Outlook has been kept stable with Indian economy. S&P says that India’s economy is getting stronger. The government is constantly trying to control its expenses. Apart from this, India’s economic growth is also happening rapidly, which is a major reason for this upgrade.
What will be the benefit of India to increase rating? This means that investors around the world will increase trust in India, because due to better ratings, India can be easy and cheaper to take loans. Also, it shows that the economy of India is going in the right direction.
World Bank preserved GDP growth at 6.3% In June, the World Bank retained India’s GDP growth at 6.3% for FY 2025-26. Last year it was 6.5%. In April, the World Bank reduced India’s development estimate for 2025-26 from 6.7% of January to 6.3%.
The World Bank report has estimated India’s growth rate of 2026-27 to be 6.5%. The World Bank also said that India will remain the fastest growing major global economy.
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