India may fail to achieve the FDI target of 35 billion dollar in the current fiscal due to global economic slowdown and spiralling inflation led by increasing oil prices, a survey said.
Assocham in its survey of 400 CEOs on realistic assessment of FDIs inflow said that India's FDI target is likely to fall short by 7-8 billion dollar.
The industry chamber has asked the Government to take sufficient measures to mount pressure from various bilateral and multilateral agencies on oil producing countries to increase oil production.
Finance Minister P Chidambaram recently appealed the oil producing countries to increase its supply to the control prices. He had advocated for a price band mechanism for crude oil for producers and consumers to find common ground.
Adverse sentiments in the stock Markets, bottlenecks on infrastructure investments, Government inability to sign nuclear deal are some of other reasons due to which the FDI target may fall short, the survey said.
Government had set the target of 30 billion dollar in the last fiscal, but it received about 25 billion dollar FDIs.
"The financial year 2008-09 has begun with difficult time in which the inflationary pressures mounted beyond manageable limits, the adverse impact of which on Indian Inc has been substantial in the sense that the yearly profitability of domestic industry would suffer a beating to an extent of 15-20 per cent," Assocham President Sajjan Jindal said.
Majority of the CEOs viewed that inflationary pressures would continue to grapple the Indian Economy and they expect a further rise in interest rates which would cause credit and liquidity crunch in the domestic market, which will discourage foreign investment, the survey said.