India hopes to attract over $35 bn foreign investment

October 13th, 2008 - 6:01 pm ICT by IANS  

New Delhi, Oct 13 (IANS) Foreign direct investment in India will top $35 billion this fiscal despite the current global financial turmoil, commerce minister Kamal Nath said here Monday.”Liquidity will have some impact on FDI investments but that will be minimal,” he said on the sidelines of the India-Brazil South Africa Business Summit, even while maintaining that the $35 billion foreign investment targeted this year would be achieved.

The minister had said Oct 8 that the country received FDI worth $2.25 billion and $2.32 billion in July and August, respectively. The total FDI between April and August stood at $14.6 billion.

Referring to the global financial turmoil, Kamal Nath said the liquidity crunch in the US was directly impacting the Indian markets. At the same time, he expressed confidence that the measures adopted by the central Reserve Bank of India (RBI) would reflect on the ground.

“It is not a solvency issue,” he said, adding that the reduction in the cash reserve ratio (CRR) by RBI would lead to more liquidity.

Kamal Nath said the Indian securities markets had taken a beating owing to external reasons, but added: “Financial institutions are finding that their most liquid assets are on the Indian stock market; that speaks well of the Indian market.”

“The dollar is weakening because of outflow, but I don’t think it is permanent,” he said.

The minister also said the government would not intervene unless the situation became extreme.

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