"If the uncertainty continues, business financing conditions could deteriorate further and investment growth could slow further," Tan said. "India's long term growth prospects could weaken on a sustained basis, with negative implications for the sovereign credit fundamentals," he said.
"It is, however, too early now to tell if this scenario will come to pass. This will be largely dependent on policymakers' reactions to these latest developments," Tan said. India has the lowest investment grade rating and S&P is the only agency which has a negative outlook while Moody's and Fitch have a stable outlook on India.