Context:

• Global credit rating agency Fitch affirmed India’s sovereign rating at ‘BBB-’ with ‘stable’ outlook, saying that the country’s medium-term growth potential is strong.

Other details:

• ‘BBB-’ rating indicates lowest investment grade.
• India’s rating balances a strong medium-term growth outlook and favourable external balances with weak fiscal finances and some lagging structural factors, including governance standards and a still-difficult, but improving, business environment.
• Fitch had last upgraded the rating from ‘BB+’ to ‘BBB-’ with stable outlook on August 1, 2006.
• Later, it changed the outlook to negative in 2012 and then again to stable in the following year, though it kept the rating unchanged at the lowest investment grade.
• In November 2017, US-based credit rating agency Moody’s had upgraded India’s sovereign credit rating by a notch to ‘Baa2’ form Baa3 with a stable outlook citing improved growth prospects driven by economic and institutional reforms.
• The ‘Baa3’ rating was the lowest investment grade just a notch above ‘junk’ status.

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