New Delhi: Moody’s Investors Service on Wednesday said the failure to implement reforms by passing the GST and land bills in parliament could potentially hurt investments amid weak global growth and prove to be a “downside factor” for Indian companies.

“It seems highly unlikely that the major reforms will get enacted by the upper house of the Indian parliament where the ruling coalition is in minority. A failure to implement these reforms could hamper investment amid weak global growth,” Moody’s vice president Vikas Halan said in a report.

“The government is unlikely to win a majority in the upper house if it keeps losing state elections like it did recently in Delhi and Bihar. Opposition parties are unlikely to allow key reforms to go through,” he added.

The constitution amendment bill for Goods and Services Tax (GST) has been passed by Lok Sabha, and is pending in the Rajya Sabha, where the ruling NDA does not have majority.

Minister of State for Finance Jayant Sinha told reporters here on Monday that the government is making efforts to convince the opposition about the GST bill.

“We are trying to talk with them (opposition) about all the aspects of GST. We all recognise how important this is for the economy so we are in continuous discussion to see what we can do to get it passed in the winter session,” he said.

The American agency cautioned that continued weak global growth and the prospect of the US Federal Reserve raising interest rates may also have an impact on Indian companies.

“The corporates remain vulnerable to the volatile Indian rupee as against the US dollar and to low commodity prices, which has in turn led to a sharp decline in external trade,” Halan said.

“The fall in commodity prices has benefited many Indian corporates given the country’s status as a net importer of raw materials and its recent history of high inflation. But low commodity prices will result in deterioration of credit metrics of metals and mining companies,” he added.

Other “downside factors” listed by Moody’s are loss of reform momentum leading to annual GDP growth falling below 6 percent, resulting in deterioration of credit metrics, besides higher interest rates brought on by rising inflation and exchange rate volatility, resulting in a tight funding environment.

Among the upside factors include further government measures that could sustain the GDP growth at 8 percent plus, leading to a broad-based improvement in corporate credit metrics.

Also, improvement in the global macroeconomic environment leading to stabilising commodity prices and credit markets would be positive, it said.

Sector-wise, Moody’s expects upstream oil and gas companies to benefit from lower fuel subsidy burdens, although low crude and domestic natural gas prices will continue to hurt profitability.

However, refining and marketing companies should benefit from healthy margins as demand growth outpaces expected capacity additions, Moody’s said.

Moody’s negative outlook for the steel industry reflects elevated leverage and an extended period of low prices owing to continuing steel imports, while the negative outlook for metals and mining companies reflects bleak global commodity prices.

In real estate, Moody’s expects demand to improve in 2016 on the back of lower interest rates, although approval delays could postpone project launches for property developers.

In the auto sector, Moody’s said that retail sales volume will grow 6 percent in 2016 on sustained growth in passenger vehicles sales and recovery in commercial vehicle sales.