Moody's Investors Service could complete reviewing India's foreign currency debt rating by mid-February, with chances of an upgrade of more than 50 per cent, the global rating agency's India analyst said.

In mid-November, Moody's had put India's 'Ba2' foreign currency debt rating and 'Ba3' foreign currency bank deposits rating on review for a possible upgrade, citing the country's healthy external financial situation.

The 'Ba' rating indicates questionable credit quality.

"Normally such reviews take up to three months following the initial announcement," Kristin Lindow, Moody's India analyst, told Reuters in an e-mail message received on Wednesday.

"The rating committee members vote for the review if they each believe that the chance of ultimately voting for an upgrade is greater than 50 per cent."

"We just need to be convinced that the external position of the country is sufficiently strong that any potential upgrade could hold even in adverse circumstances such as a weaker BOP (balance of payments) position," she said.

External flows into India have been robust so far in the current financial year to March 2003, helped by a surge in exports.

India's balance of payments surplus for April-September was $6.59 billion, sharply up from $1.95 billion for the same period of the previous year.

Its foreign exchange reserves stood at $70.29 billion on December 27, up more than $16 billion since the start of the financial year.

Lindow said Moody's also had to assess whether continued inaction on the fiscal deficit could lead to an external payments crisis.

India's domestic debt rating is also 'Ba2', but carries a negative outlook, which Lindow said was because of the government's huge debt burden and the expectation that a fiscal correction was unlikely to be implemented in the near term with an election approaching.

India must hold a general election by late 2004 as the current government took power in early October 1999 and has a five-year mandate.