The central bank may unveil more measures to support the financial sector, like credit guarantee schemes or a blanket moratorium, if indications of economic stress mount, the ratings agency said.
Asia's third-largest economy is battling a ferocious surge in coronavirus cases that has forced several states to go into lockdowns, although institutions like Fitch expect the shock to economic activity will be less severe than in 2020.
"The authorities are implementing lockdowns more narrowly, and companies and individuals have adjusted behaviour in ways that cushion the effects," Fitch said in a report.
However, it said disruptions could persist longer and spread further than its baseline case scenario, especially if lockdowns were introduced in more regions or nationwide, noting that a drop in April-May activity would delay the country's recovery.
Last week, S&P Global Ratings said its outlook on India's sovereign debt remained stable, even though surging cases could threaten the economic recovery it had seen so far.
India could remain vulnerable to further waves of the pandemic even once the current surge subsides due to its slow pace of vaccination, Fitch warned.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.