Fitch keeps India's auto loan ABS outlook neutral, citing strong growth, low delinquencies, and resilient demand.

Fitch Ratings maintains a 'Neutral' outlook for India's auto loan asset-backed securities sector in 2026, citing stable performance amid strong domestic economic growth projected at 7.4% for FY26 and 6.4% for FY27. Resilient demand and rising real incomes are supporting consumer spending, while secured loans on income-generating assets like commercial vehicles underpin steady loan performance. Delinquency rates for Fitch-rated transactions remained low at 0.8% for loans overdue by over 90 days as of November 2025. Favorable monsoon rains in 2025 boosted farm incomes and tractor loan performance, and the freight sector’s adaptability mitigates trade risks. The outlook is stable due to strong credit enhancement, though risks remain if growth slows sharply or underwriting weakens.