Why did Fitch not upgrade the India ratings like Moody’s did?

Let me clarify that even Moody’s did not upgrade India’s sovereign rating but only maintained it at BBB+. However, what Moody’s did was to raise the outlook for the rating from Negative to Neutral. This provides an additional cushion to the economy from any likely downgrades to the speculative levels. However, unlike Moody’s, Fitch did not raise the outlook for India and has maintained the outlook as Negative.

Fitch has highlighted a number of positives in its report. For example, Fitch has stated that the sharp recovery from COVID-19 and COVID 2.0 had raised the medium term growth outlook for India. The negative outlook has been retained by Fitch owing to the high level of fiscal deficit and the likely medium term trajectory of debt. Fitch is bullish on growth and has pegged GDP growth at 8.7% for FY22 and 10% for FY23.