Strong external liquidity Good growth prospects Deep capital market Fiscal inflexibility due to high debt and large deficits High contingent liabilities Low-income economy The ratings on India reflect the country's strong economic growth prospects and its deep government debt market, which helps accommodate its weak fiscal position. India's economic prospects remain strong, with growth likely to average more than 7.0% in the medium term. Underpinning that growth is the gradual deregulation of the industrial sector, continued trade liberalization, a dynamic service sector, and modest improvements in infrastructure. Given the buoyant private and public investments, and some progress in economic reforms, India's business environment is likely to improve in the years ahead, notwithstanding the current dislocations in global credit markets. Its
