India to remain fastest growing economy in Asia: Fitch Ratings

India is set to remain Asia’s fastest-growing major economy in 2026, according to a recent report by Fitch Ratings.

Fitch expects India’s economy to expand by 6.4 percent in 2026, placing it ahead of regional peers such as the Philippines, Indonesia and Malaysia.

“Economic growth in India, Indonesia and the Philippines is likely to be least affected by trade pattern changes in the near term, as manufacturing exports are low in their relatively closed economies. India is expanding its trade relationship with countries outside of the US through a number of trade deals, most recently with the EU, to offset risks from US tariffs,” Fitch noted.

India has secured deals with the US and the EU over the last two months. The US deal was announced on February 6.

The ratings agency noted that the impact of the US tariff is unlikely to be clear.

On the policy front, the ratings firm noted that RBI would keep rates on hold for the near term.

“We expect the Reserve Bank of India to keep its policy rate unchanged at 5.25 percent, following the cut last December,” it noted.

India has enhanced fiscal transparency, including more spending items in the budget, and revenues are buoyant on higher growth and introduction of goods and services tax, increasing the likelihood that government debt can follow a modest downward trend in the medium term, Fitch noted.

However, it highlighted that debt to GDP is expected to stay high.