Ratings agency Moody's on Tuesday retained its outlook on India's Baa3 sovereign rating at 'stable', thanks partly to the country's high savings and investment rates.

Moody's said that India's Baa3 sovereign rating was supported by various credit strengths such as strong gross domestic product (GDP) growth and better rates of savings and investments.

The ratings agency said in its annual report, "The Baa3 sovereign rating is supported by credit strengths which include a large, diverse economy, strong GDP growth as well as savings, and investment rates that exceed emerging market averages."

However, the ratings agency cautioned that poor infrastructure, recurrent inflationary pressures, uncertain operating environment and high fiscal deficit & debt ratios still remained key challenges for the economy.

The retention of stable outlook for the India's sovereign rating has come as a big relief for the Congress-led UPA government which is struggling to keep the process of economic reforms on track amid hard political opposition.

Moody's also pointed out that the delays in the implementation of reform measures due to ongoing domestic political uncertainty and global slowdown could cause growth to remain subdued in the near term amid continued domestic political uncertainty and a global slowdown.