S&P maintains negative outlook on India's rating

Mumbai | Updated: Aug 21 2013, 16:35pm hrs
OutlookS&P maintains negative outlook on India's rating. (Reuters)
Standard & Poor's maintains its negative outlook on India's BBB- sovereign credit rating, the rating agency said in an emailed response to Reuters on Tuesday. Recent measures taken to restrict capital outflows have increased uncertainty among foreign and domestic investors, said Kim Eng Tan, senior director, sovereign and international public finance, Asia Pacific at S&P.

"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.