The ratings on the Republic of India reflect the country's strong growth prospects, moderately deep capital market, adequate external balance sheet, and resilient economy. However, a weak and unsustainable fiscal position, and high debt burden constrain the ratings. The Indian economy and the financial system were resilient to the global financial crisis and the ensuing recession; India is one of the few countries that we expect will maintain a positive economic growth rate, of 6.2%, in fiscal 2009 (year ending March 31, 2010). The gradual deregulation of the industrial sector, continued trade liberalization, a dynamic service sector, and modest improvements in infrastructure underpin this growth. Favorable demographics and a growing middle class will also contribute to economic growth through higher
