The government on Wednesday sought to allay fears of the country being hit by the worsening financial turmoil saying its strong fundamentals would continue to attract foreign direct investment and that the $35 billion FDI target for the fiscal would be achieved.

Commerce and industry minister Kamal Nath, releasing the latest FDI data here, said the country had received $14.6 billion worth FDI in April-August period in this financial year, which is a whopping 124% rise over $6.5 billion in the corresponding period a year ago.

In 2007-08, India received FDI inflows of $24.57 billion. Nath said August alone saw FDI inflow of $2.32 billion, a jump of 180% over August 2007. ?This is unprecedented…this is a good sign in comparison to the global economic situation,? Nath said. Admitting that India will be affected by the sentiment and frenzy effect of the global situation, Nath, however, said ?we have the confidence to tide over the global financial crisis?.

However, experts are not that optimistic. Rajeev Kumar, Director and Chief Executive of Indian Council for Research on International Economic Relations (ICRIER) said most of the FDI that the country is receiving now are old commitments made on the basis of the analysis then.

?The FDI inflows may well be at its peak now. One should not read too much into this,? he said, adding that the government should not be complacent and should stop letting the rupee depreciate so sharply. The rupee has depreciated by 19% this year so far.

?Now is the time to put the brakes on (rupee depreciation) given that the trade balance is deteriorating.?

Pointing out that the manufacturing sector received $5 billion worth FDI during the April-August period, an increase of 41% over inflows, Nath said ?the good part is that recipient sectors are manufacturing and infrastructure.?

The industries in the manufacturing sector that got a sizeable portion of FDI include metallurgical industries ($765 million), cement and gypsum products ($627 million), automobile ($441 million), telecom equipments ($309 million) and chemicals, other than fertilisers ($301 million).

Mauritius continued to be the leading FDI source, comprising 37% of the inflows. Other significant amount of FDI has come from Singapore ($1.45 billion), the US ($943 million) dollar, Cyprus ($433 million).

Leading investments included Royal Bank of Scotland, UK acquiring shares in Reliance Ports and Terminals Ltd in a $382 million dollar transaction and DE Shaw Composite Investment, Mauritius pumping in $384 million dollar in DLF Assets Ltd, Vidhya Jayaraman, Singapore investing $328 million dollar in LP Cube Systems, a software firm and Essar Logistics Holdings picking up a $452 million dollar stake in

Essar Steel. Sectors that got maximum FDI in 2008-09 included services, housing and real estate, construction activities, metallurgical industries and computer software and hardware.