Fitch Ratings, in a statement on Monday, said that India's outlook is stable. It affirmed  India's Long-Term Foreign- and Local-Currency Issuer Default Ratings at 'BBB-'. 

Fitch Ratings said, "India's sovereign ratings balance a strong medium-term growth outlook and favourable external balances with a weak fiscal position and difficult business environment. However, the business environment is likely to gradually improve with the implementation and continued broadening of the government's structural reform agenda."

GDP Forecast

Fitch said that expects India's real GDP growth to accelerate to 7.7% in FY17 and FY18, from 7.1% in FY16.

The agency expects structural reforms to increase growth, along with higher real disposable income supported by the implementation of the 7th Pay Commission recommendations and a monsoon with average rainfall expected by the Indian Meteorological Department.

"The government has been consistently rolling out its ambitious reform agenda for almost three years and remains committed to continued reforms. A rise in foreign direct investment (FDI) inflows to USD55.5 billion in FY16, from USD36.0 billion in FY14, shows that India is becoming a more attractive destination for foreign investors," it said. 

"Weak public finances continue to constrain India's ratings, with a high general government debt burden of 67.9% of GDP ('BBB' median: 40.9%) and wide fiscal balance of -6.6% of GDP ('BBB' median: -2.7%), as estimated by Fitch for FY17, Fitch said, adding, "However, there are some early indications that fiscal policy might become more focussed on bringing down debt."