Earlier this week ratings agency Standard & Poor’s said India could be the first BRIC economy to lose its investment grade status , which was followed a day later by data showing factory output had nearly stalled in April.
While India’s recent dismal economic performance has investors looking for exits, several experts tell CNBC things are not as bad as the headlines suggest.
"India has been and will continue to be a very strong nation," Sean Egan, Founding Partner of Michigan, U.S.-based ratings agency Egan-Jones, told CNBC Asia’s “Squawk Box” . "You will find that in 5 years, it has an even more important place in the global market. I think they will do fairly well over time."
Slowing growth, accelerating inflation and rising fiscal and trade deficits along with a pause in economic reforms have pushed India’s currency to record lows and hurt investor sentiment. But some analysts argue that there is a silver lining in the form of India's strong consumer base and a declining debt-to-GDP (gross domestic product) ratio.
“I think most investors look at the hard numbers to see whether there’s a big increase in debt-to-GDP, and I think compared to a lot of other countries, India is probably better off,” Egan said.
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