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Fitch revises India rating outlook to negative

Fitch has revised India's sovereign ratings outlook to negative from stable on Thursday, citing worries about fiscal policy, privatisation and deterioration in the country's foreign investment climate.

The international rating agency currently rates India's foreign and local currency obligations at BB-plus and BBB-minus respectively.

"The negative rating outlook reflects the slow progress of the government in implementing privatisation and addressing the weaknesses in public finances," Fitch said in a news release.

India's fiscal-monetary policy mix in India remains unfavourable, resulting in relatively high real interest rates and crowding out of private sector investment, the news release said.

"Until the authorities display a concerted willingness to address fiscal imbalances, India will remain locked in a stop-go cycle of growth and the sovereign could slip into a debt trap," Fitch said.

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