FDI norms relaxation by India credit positive: Moody's

India’s decision in easing the Foreign Direct Investment norms (FDI) in host of sectors, is a positive move for the country's sovereign ratings, said Moody's Investors Service.

Moody said that, "The announcement is credit positive because it demonstrates a continuation of reform momentum and paves the way for private investment and a boost in productivity.”

On 20 June, the government along with PM Narendra Modi relaxed FDI norms in sectors such as civil aviation, single-brand retail, defence and pharma by permitting more investments under automatic route.

The move was to further liberalize FDI regime with the objective of "providing major impetus to employment and job creation in India"

However Moody warned on reforms stating, they are obstructed due to  passing of a revamped goods and services tax and land acquisition rules.

"We expect that political division will keep the reform process uneven and slow-moving," Moody's said.

Overall Moody provided India a  "Baa3" rating, the lowest investment-grade rating, with a "positive" outlook.