Foreign direct investment into the country India will feel the heat of the global financial turmoil, Commerce and Industry Minister Kamal Nath has said. Of course, we will see the impact (of global financial crunch) on our FDI inflows in the next six months, Nath said at a function of chartered accountants in New Delhi.It was only last week that the minister had expressed his optimism, and said India would exceed its target of $35 billion FDI this fiscal.
FDI inflows of $14.6 billion in first five months of 2008-09 showed an impressive growth of 124 per cent over the same period last year.Nath cited example of how the mood reversed in the stock market since January, 2008. We saw boom in our Sensex in January, when it was over 20,000 and today there is a gloom, he said, adding, there is not enough money to pour out.The BSE benchmark Sensex has dipped by over 50 per cent from a high of 21,000 in January to below 10,000 on October 17.With the foreign institutional investors (FIIs) pulling out over $11 billion from the beginning of this calendar year the rupee has come under intense pressure and lost over 20 per cent since April this fiscal.
Nath said FIIs have been pulling out of India in the last several weeks. While this did not reflects India''s fundamentals, it shows the inter-connection. Prime Minister Manmohan Singh, in Srinagar on October 10, had also expressed his concern over the Indian currency coming under pressure. Analysts say if the pace of FDI inflows get affected, the currency may further weaken. India''s foreign exchange reserves dropped by close to $10 billion for the week-ended October 10 from the preceding week. China, one of the largest exporting countries in the world, is also likely to see the impact of recession in the US and European economies.
FDI inflows of $14.6 billion in first five months of 2008-09 showed an impressive growth of 124 per cent over the same period last year.Nath cited example of how the mood reversed in the stock market since January, 2008. We saw boom in our Sensex in January, when it was over 20,000 and today there is a gloom, he said, adding, there is not enough money to pour out.The BSE benchmark Sensex has dipped by over 50 per cent from a high of 21,000 in January to below 10,000 on October 17.With the foreign institutional investors (FIIs) pulling out over $11 billion from the beginning of this calendar year the rupee has come under intense pressure and lost over 20 per cent since April this fiscal.
Nath said FIIs have been pulling out of India in the last several weeks. While this did not reflects India''s fundamentals, it shows the inter-connection. Prime Minister Manmohan Singh, in Srinagar on October 10, had also expressed his concern over the Indian currency coming under pressure. Analysts say if the pace of FDI inflows get affected, the currency may further weaken. India''s foreign exchange reserves dropped by close to $10 billion for the week-ended October 10 from the preceding week. China, one of the largest exporting countries in the world, is also likely to see the impact of recession in the US and European economies.
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