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The belief that the most rapidly growing developing nations can sustain rapid economic improvement and GDP expansion received another blow. China’s GDP has already begun to slow, the most visible indication of the trend. S&P downgraded its outlook for India.

The Moody’s note:

We are revising the outlook on the long-term ratings on India to negative  to reflect at least a one-in-three likelihood of a downgrade if the  external position continues to deteriorate, growth prospects diminish, or progress on fiscal reforms remains slow.

The caution shares something else common to concerns with China. Fiscal reforms in the People’s Republic have been slow, although there are signs it may revise how its sets the value of its currency and finances its banks.  A full downgrade of India would be a sign that much of the developed world has moved toward the slowdown which already exists elsewhere.