Chennai: Global credit rating agency Moody’s Investors Service and its Indian affiliate ICRA Ltd on Monday said their poll said India’s economic exposure to external risks has gone up during the past seven months.

In a statement, Moody’s said the poll was conducted during Moody’s and ICRA’s India Outlook Conference in Mumbai on 13 January 2016.

The event brought together some of the country’s largest investors, intermediaries and issuers, with 110 market participants attending.

“The market participants we surveyed are increasingly concerned about the potential spillover on India’s growth story of external risks such as interest rate tightening in the US and China’s ongoing slowdown,” Rahul Ghosh, a Moody’s vice president and senior research analyst, was quoted as saying in the statement

Of the market participants who responded to Moody’s and ICRA’s question on the greatest risk to India’s macroeconomic growth over the next 12-18 months, 35 percent saw external shocks as the greatest challenge facing India’s economy, up from just 10 percent for the previous Moody’s and ICRA poll conducted in May 2015, the statement said.

“However, the result is more likely a reflection of the broad-based spike in global risk aversion, rather than India’s relative vulnerabilities,” said Ghosh.

According to him, investors term India as much better placed in terms of growth than most of its similarly rated emerging market peers, such as Indonesia, Turkey, Brazil, South Africa and Russia.

Moody’s has released its report titled “India Credit – Heard from the Market: India Not Immune to External Risks”.

The same poll of respondents found that 32 percent thought sluggish reform momentum will be the largest threat to India’s gross domestic product (GDP) growth, down from 47 percent in May 2015.

As for the market participants who responded to the polling question on India’s economic growth rate, more than three quarters of those surveyed said headline GDP growth will stay between 6.5- 7.5 percent over the next 12 to 18 months.

On the asset quality of Indian banks, the market participants polled were split on whether government initiatives will help improve the banks’ asset quality, with 40 percent expecting a reduction in weak assets in the coming 12-18 months compared with 45 percent who believe asset quality is unlikely to improve, the statement said.

However, 89 percent of the respondents expect single digit loan growth for the public sector banks owing to capital constraints.