labels: economy - general, markets - general
India becoming a parking lot for investors: Kamal Nathnews
30 October 2007

Mumbai: India is emerging as a ''parking lot'' for global investors and as the capital flows into the market takes it to the 20,000-point mark, it "causes concerns" for the government, commerce and industry minister Kamal Nath said.

"The Sensex yesterday moved to the 20,000 mark. Sometimes it concerns us," he said at the Fortune Global Forum.

However, Nath said strong fundamentals of the Indian economy would ensure flow of funds in the country. "With the strong fundamentals and PE ratio, India is emerging as a major parking lot for investors," he said.

The country has seen foreign institutional investments surge to a record $17 billion this year. In October alone, FIIs have pumped in nearly $8 billion. The flows peaked after the US Federal Reserve cut its key rate on September 18.

Speaking at the event, finance minister P Chidambaram also said the country needs to put in place appropriate regulations to manage capital inflows.

"Today in India, we face a problem of enormous capital flows. This is a completely new situation for us. We welcome capital but we must learn how to manage capital, how to absorb capital," he said.

India, he said, needs huge investments from abroad to develop and be a part of the global economy, but these need to be regulated.

We welcome capital flows but we need to learn how to manage them in proportion. We do not want regulation to fall behind innovation. We cannot afford shocks and to avoid shocks we must regulate," the finance minister said.

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India becoming a parking lot for investors: Kamal Nath