A magistrate court in Dominica on Thursday moved businessman Mehul Choksi from police custody to a state prison, his lawyer in India said, but added that he would continue to remain in hospital as his medical condition "deteriorated".

"Yes, (Choksi's) police custody has been changed to prison custody but he shall remain in hospital as his medical condition has deteriorated," lawyer Vijay Aggarwal said.

His legal team had submitted a medical certificate from doctors at the Dominica China Friendship Hospital, where Choksi is undergoing treatment, of "mental stress" and elevated blood pressure.