Fitch gives India a moderate rating, just one above ‘junk’!

Prime Minister Modi, who has been pitching India as a favourable investment destination globally, will not be happy reading this. Credit rating agency Fitch today gave India’s rating at ‘BBB’, with a stable outlook and said that strong external finances will balance out the structural features of the Indian economy that includes its business environment.

"India's sovereign ratings and a stable outlook balance a strong medium-term GDP growth outlook and favourable external finances, including a strong foreign reserves buffer, with a high government debt burden and weak structural features, including a difficult - but improving - business environment," Fitch Ratings said in a statement.

"India's positive GDP growth outlook stands out globally. The RBI policy rate cuts of 1.25 per cent in total in 2015 are also likely to contribute to higher GDP growth even though monetary transmission is impaired by relatively weak banking sector balance sheets," it added.

It should be noted that BBB is just one level above the ‘junk’ status.