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The stock market has already dropped some 17 percent this year, hit by fears that economic growth will cool due to higher interest rates and souring foreign investor sentiment amid a spate of high-profile corruption scandals.
In January, foreign institutional investors turned net sellers for the first time in eight months, dumping some .
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4 billion in Indian stocks, according to industry data.
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"Corruption and ensuing political risk has without question become a major concern" with foreign investors, Mumbai brokerage Espirito Santo Securities said in a commentary.
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The government says it is confident India's economy will expand by 8.6 percent in the fiscal year ending in March, eclipsing the previous year's 8.
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But growth may slacken to 7.7 percent next year as resurgent oil prices and further rate rises to tame inflation "take their toll", Credit Suisse economist Robert Prior-Wandesforde cautioned.
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Goldman Sachs economist Tushar Poddar said he was holding t