Moody's Investors Service on Friday cut India's GDP growth forecast for the calendar year 2019 to 6.2 per cent from its previous estimate of 6.8 per cent.
For 2020 calendar year, it reduced the estimate to 6.7 per cent.
It said the weaker global economy has stunted Asian exports and the uncertain operating environment has weighed on investment.
"And with India, the moderation in business sentiment and slow flow of credit to corporates have contributed to weaker investment in the country," said Moody's.
"While not heavily exposed to external pressures, India's economy remains sluggish on account of a combination of factors including weak hiring, financial distress among rural households and tighter financing conditions due to stress among non-banking financial institutions," it said.
Moody's said the Reserve Bank of India (RBI) has been most active in cutting rates in support of growth, but lingering financial sector issues may blunt the effectiveness of monetary stimulus.
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Across 16 Asian countries, it listed three highlights. One: weak output year-to-date and deteriorating outlook for trade drive lower growth forecasts.
Two: spillovers from uncertain operating environment are most apparent in softer capital formation although some signs of trade and investment diversion are emerging. And three: stable private and public consumption to be sustained on account of monetary and fiscal policy accommodation.
Moody's revised downwards its GDP growth forecast for 16 economies in Asia Pacific. Of the 16, it said Hong Kong and Singapore have shown particularly weak expansions this year with very large deteriorations in real GDP growth when compared to the first half of 2018.
Externally-oriented economies saw a sharper slowing during the first six months of 2019 while domestic factors have had a greater influence on growth in Japan, India and the Philippines.
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