Global slowdown hitting investments in India: FM

Finance Minister P Chidambaram today said global slowdown was affecting investment as investors were deferring their plans in the country.

Stating that there were clear signs of a slowdown in the world economy, Chidambaram said the pessimism was affecting the decisions of global investors, who were adopting the policy of "wait and watch."

"This has obvious negative effects on future growth. Global slowdown, rising inflation and subdued interest in investment make for a combination that can have only negative consequences for developing countries," he said at a lecture here.

"There is a growing feeling among international experts that the US economy faces serious recessionary pressures," he said, attributing lack of adequate regulations in the US sub-prime market for global uncertainty.

He said developing countries, including India, were "helpless victims" of global uncertainty.

Referring to the impact of the US slowdown, he said turbulence in the financial markets had added to the difficulties of sustaining high growth in India.

"As the crisis moved from one market to another, and when it entered the credit market, the consequences of the crisis are being felt in India too."

Chidambaram said many banks in Germany and the UK had to be bailed out after the sub-prime mortgage crisis hit the US, though Indian banks had so far remained largely unaffected.