With rating agencies Fitch and Moody's affirming India's credit outlook as "stable" and "positive" respectively, Ficci today said the move will uplift investor sentiment and help attract foreign investments.
"It reflects the improving outlook for Indian economy on the back of various reform measures taken by the government towards simplification of regulatory regime, maintaining fiscal and external balances and fostering a conducive business climate," Ficci Secretary General Didar Singh said.
"It will further uplift global investor sentiment and help in attracting greater foreign investments across the board. To sustain investor interest, implementation remains the key. We hope that the reform momentum shall continue with an emphasis on long-term socio economic development," Singh said.
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In a big vote of confidence for the Modi government, rating agency Moody's today raised India's credit outlook to 'positive', while Fitch projected faster growth -- raising hopes for an upgrade in its sovereign rating in the next 12-18 months.
India's sovereign rating by Moody's stands at 'Baa3', the lowest investment grade and just a notch above 'junk' status, while it earlier had a 'stable' outlook for the country.
Fitch, which maintained its equivalent 'BBB-' rating with stable outlook, on the other hand projected 8 per cent GDP growth for the current fiscal, higher than 7.8 per cent estimate of the RBI. It also indicated positive rating action if the government follows its fiscal consolidation roadmap.
The sovereign rating and outlook of a country are often used by foreign investors and global bodies to gauge its investment climate. They also have a bearing on the cost of overseas borrowing by domestic companies.
