The rate hike was well-signalled and in line with Fitch's expectations. The real uncertainty remains on how quickly the rates will rise and to what peak. There is still a significant wedge between where the Fed is telling us it sees rates are going and what the market is pricing in," said Andrew Colquhoun, Head of Asia-Pacific Sovereigns, Fitch Ratings.

1. Fed impact: 4 reasons why India
stands out, to draw more FII cash

2. • Improvement in external balance:
India's external balance has improved significantly since mid-2013, with foreign
exchange reserves rising by some $65 billion to $353 billion as of November
2015 and the current account deficit narrowing.
Foreign exchange reserves increased by $483.2 million to $352.10 billion on
December 4, over the previous week, said a media report. In rupee terms, forex
reserves climbed by Rs 88.6 billion over the week to Rs 23,415.5 billion on
December 4, 2015 .

3. • Commodity importer:
India is less dependent than several of its peers on commodity exports, and has thus
not been negatively affected by the global rout in commodity prices. According to
latest trade data, imports declined over 30 per cent to $29.7 billion from $42.7
billion a year ago, led by low crude oil prices and subdued imports of gold, coal and
fertilizers. This helped shrank the trade deficit to $9.7 billion from $16.2 billion.

4. • Sovereign debt:
Only a small part of India's sovereign debt is held by foreigners or is denominated
in foreign currency.
• Economic growth:
Fourth, India's favourable economic growth outlook makes India relatively
attractive for foreign investors. India's positive economic growth outlook stands out
globally.
Fitch forecasts India's real GDP growth to accelerate to 7.5 per cent in the fiscal
year ending March 31, 2016 (FY16) and 8.0 per cent in FY17, from 7.3 per cent in
FY15, supported by the government's beefed-up capex spending and gradual
implementation of a broad-based structural reform agenda," Fitch said in a
statement.

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