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Global financial crisis may hit FDI inflows: Kamal Nath

Source: PTI
October 13, 2008 15:57 IST
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Downplaying the impact of the global meltdown, Commerce and Industry Minister Kamal Nath on Monday exuded confidence that exports would continue to grow by 30 per cent even this month, though the financial crisis may slow down FDI inflows.

"Because of the liquidity crunch globally, some investments in the future may be affected," he told reporters.

He was, however, quick to add that the effect would be minimal and "at least for this year we will achieve our (FDI) target." During the current year he estimated that FDI inflows would surpass the target of $35 billion.

Nath said exports continue to be robust, witnessing a 30 per cent growth. "Exports have gone up by 30 per cent and even this month I feel the exports will go up by that much," he said.

The minister said rupee was depreciating against the dollar because of continuous outflow of the currency. "I do not think it is permanent."

Rupee is trading closer to 49 mark now against the dollar.

Echoing Finance Minister P Chidambaram's views, Nath said the government does not believe in calibrating the rupee.

"In India, we do not calibrate rupee. . . the government should not intervene unless there are extraordinary and unnatural situations arising," he said.

On the downslide in stock markets, he said external reasons were responsible for the slide.

"Our stock markets are going down because of external reasons...Their (the US and EU) liquidity crunch is causing problems in our stock markets."

"The most liquid assets are on the Indian stock markets," Nath said, adding that this speaks well of the Indian stock market.
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