The possibility of India losing its investment grade credit rating has receded as a result of the reform measures taken by the government since September last year, an analyst with rating agency Standard & Poor's told Reuters on Thursday.

"It is still at least a one in a three chance that we could downgrade. But the likelihood of it is less than when we first indicated the negative outlook in April last year," analyst KimEng Tan said in a telephone interview from Singapore.

The government has undertaken a series of economic reforms to boost investor sentiment, opening the retail and aviation sectors to more foreign investment, cutting expensive fuel subsidies, slapping higher duties on gold imports and delaying tax changes that threatened to deter capital inflows.