MUMBAI: The Federal Reserve's latest hint at an early end to monthly bond repurchases and an upward revision in interest rates from early 2015 is unlikely to have a major impact on India, according to analysts.The U.S. central bank last week also announced it would reduce its bond-buying programme to $55 billion from $65 billion every month. "India, in our view, is in a much better position to deal with this scenario now," Deutsche Bank said in a report. "Policy actions have reduced the economy's external account deficits and reliance of short-term external flows, fiscal consolidation has continued, and inflation respite is palpable," it said.

Domestic rating agency Care Ratings also said it does not see any major impact. "The domestic economy is influenced majorly by local factors as opposed to external. Hence, it is expected to remain largely unaffected by the ongoing tapering programme of the Fed," Care said. Both the forex and the stock markets did not show any knee-jerk reaction following the Fed announcement. In fact, two out of the three trading sessions since the announcement, the markets and the rupee gained. The report further said the financial markets have rallied considerably in anticipation of an economic reform friendly election outcome, foreign investor interest has surged, the rupee has been remarkably strong (rose close to 12 percent from the August depth of 68.85), and latest data suggest an economic recovery is in the making.

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