Fitch cuts India view to negative

Fitch Ratings said it revised the outlook on the Republic of India's long-term local-currency issuer default rating to negative from stable, while affirming the rating at BBB-. The agency also affirmed its long-term foreign-currency issuer default rating at BBB-, short-term foreign-currency issuer default rating at F3 and country ceiling at BBB-.

The outlook revision is based on a considerable deterioration in the central government's fiscal position in 2008-2009, combined with a notable increase in government debt issuance to finance subsidies not captured in the budget, the agency said.

Higher oil prices have raised India's oil import bill dramatically over the past three years, Fitch said, and the merchandise trade deficit was equivalent to 7.7% of GDP in 2008.

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