Global ratings agency Moody's on Monday downgraded India's foreign currency and local currency long term issuer ratings to Baa3 from Baa2. The agency has also maintained a negative outlook on India. It comes as India is already fighting rising cases of coronavirus in the past few weeks.

"The decision to downgrade India's ratings reflects Moody's view that the country's policymaking institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period of relatively low growth, significant further deterioration in the general government fiscal position and stress in the financial sector," Moody's said on Monday.

"While today's action is taken in the context of the coronavirus pandemic, it was not driven by the impact of the pandemic. Rather, the pandemic amplifies vulnerabilities in India's credit profile that were present and building prior to the shock, and which motivated the assignment of a negative outlook last year," it added.

Meanwhile, India's gross domestic product (GDP) grew at 3.1 per cent in the final quarter of financial year 2019-20, lowest in 44 quarters, according to the government data released on Friday. Overall growth for FY20 slumped to 4.2 per cent - lowest since FY09 when GDP was 3.09 per cent - compared to 6.1 percent in FY19.