Global ratings agency, Moody's Investors Service has expressed concerns over the high level of food inflation in India.

Moody's said that the high food inflation has a negative impact for the country’s sovereign ratings as it affects the whole economy and also influences economic growth rates and fiscal and current account deficits. Moody's Investors Service has maintained a "stable" outlook for the country even as some other agencies have downgraded the country into negative category.

Moody's said in a report that the high level of food inflation could result in higher overall inflation due to higher wages and also impact government’s financial position. The analysts at the agency also noted that the high food inflation could affect the monetary liquidity situation in the Indian economy.

“Sustained food inflation is credit negative because it exacerbates India's macroeconomic challenges of slowing growth, high inflation and large fiscal and current account deficits,” Moody's said.

According to the latest figures released, the consumer price inflation increased to 10.9 per cent in February and the wholesale price index increased 6.84 per cent from the same month of the previous year. The food inflation fell slightly to 11.38 per cent in February compared to 11.88 per cent recorded in January.