Fitch Forecasts Steady Growth Amid Tariff Concerns

Fitch Ratings predicts a 6% revenue increase for its rated corporates by FY27, driven by GDP growth and improved consumer spending due to GST rate cuts. However, potential downsides include new US tariffs and rupee depreciation. India's GDP growth is revised to 7.4% for FY26.

Fitch Ratings has projected a 6% rise in revenue for its rated corporations by the fiscal year 2027, attributed to steady GDP growth and a positive consumer spending outlook following GST rate reductions. However, potential risks loom if new US tariffs are imposed or a steep rupee depreciation occurs.

The global rating agency has updated its forecast for India's GDP growth to 7.4% for FY26, up from a previous 6.9%. The GDP is expected to grow at 6.4% and 6.2% during FY27 and FY28, respectively, fueling demand for cement, building materials, electricity, and the engineering and construction sectors.

While Fitch-rated Indian corporates generally have limited direct exposure to current US tariffs, sectors like pharmaceuticals could still be impacted by further US tariff announcements. The steel and chemicals sectors may face pricing pressures if tariffs lead to supply redirection, affecting India's economic growth.

(With inputs from agencies.)