International rating agency, Fitch Ratings has said that the possibility of downgrading India's sovereign rating is more than 50 per cent during the coming 12 to 24 months.

Analysts say that the agency might downgrade the rating from BBB- to BB+ in the next 12 to 24 months. The downgrade could add pressure on the government looking to revive the economic growth and will increase the borrowing costs to the country while impacting investor outlook for the country.

"When we say more than likely chance, this essentially translates into more than 50 per cent chance. The Indian economy is facing a challenging environment as the macroeconomic picture has turned unfavourable as growth has experienced a sharp slowdown, while inflation pressures have remained persistent," said Art Woo, director in Fitch's APAC Sovereigns team.

The rating agency said that the investment climate is facing a change is structure and a review by the government to its tax proposals such as GAAR is not really surprising. Fitch Ratings had recently lowered India's credit outlook to negative.

Prime Minister Manmohan Singh has expressed concern over the rating cut by some agencies and have said that the economy will record a growth rate that is higher than previous year's 6.5 per cent. India's central bank, the Reserve Bank of India (RBI) has said in its review that the country's economy is expected to grow at 6.5 per cent.