May 14th, 2009 
Tushar Mathur
The global slowdown has affected Indian economy in many ways. The impact of the global slowdown is high on the investment scenario in India. Investment in stock during the global slowdown results loss. The stock market has been seen in weak for long time and recently gained but not sure how long it will stay.
The investment in many sectors has been hampered due to the global slowdown. India’s foreign exchange reserves declined by US $ 1.39 billion to US $ 251.70 billion in the week ended May 1. This is because of the fluctuation in the currency values in the international market, global slowdown and its impact on the major world economies.
In 2008, there was a rise in the forex reserves in India, by then the value of dollar was high against rupees. The recession and global slowdown have impact on the value of dollar in the international market. As a result world economies suffered due to the currency fluctuations. In 2008, the value of dollar against rupees was high, but in the current year the value of dollar fell against rupees and traded around Rs 50 to Rs 51 recently in India.
The global financial crisis and weak dollar have huge impact on the investments prospects in Indian. The capital formation is the key to make an economy healthy and it is clear the global slowdown hits capital formation in many countries. The investment is the major source of the capital formation in India and other countries. It is tough time for the Indian economy as the investments prospects are under the gripe of financial crisis.
Most of the units, companies, corporate depending on the foreign investments or project have suffered huge loss due to the global slowdowns. There has been a sea change in the functioning of companies in India due to the global slowdown. According to a survey conducted by KPMG International released in June 2008 states that India will become world leader in investment in manufacturing. But the global slowdown is weighing high on the India economy and its investment scenario. Government of India need to give more attention and chalk measures to attract high investments in India.
Indian economy is achieved to maintain high rate of Foreign Direct Investment (FDI) despite the global slowdown. The Government had adopted economic reforms in 1991 and has been taking measures to maintain the inflow of FDI continuously. Investors are pulling out their hands from investing in Indian stock market due to tumbling stock market and loss registering indices. It is not the fault with the Indian companies or stock market but the global slowdown.
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