In a conference call from Hong Kong, Art Woo, director of Asia Sovereign Ratings at Fitch, said the fiscal deficit numbers for 2013-14 would be important factors in the decision of ratings downgrade.
"The negative outlook reflects Fitch's concerns over deterioration in India's economic and fiscal outlooks, particularly a sharp slowdown in growth, persistent inflationary pressures and weaker public finances," Woo said.
Woo said although Indian economy might have bottomed out, there was slippage in trend growth.
If "trend growth" falls in the range of 6 to 7 percent, it would be negative for the ratings, he said.
India's gross domestic product (GDP) growth slumped to 5.4 percent in the first half of 2012-13 after registering an annual average growth of 8.2 percent in the past eight years.
The GDP growth had slowed to 6.5 percent in 2011-12 and it is expected to be around 5.5 percent in the current financial year.
