While the recent terror attacks in Mumbai might be occupying the most prominent place in every Indian's mind, no one can ignore the adverse implications of the global financial meltdown on the country. Stock prices in India and around the world have tumbled, major financial institutions in Europe and America have either collapsed or been bought out, and recession has hit many developed nations, including the United States.

In this era of globalisation, can India remain immune to the effects of this unprecedented financial crisis? Rajeev Chandrasekhar, President of the Federation of Indian Chambers of Commerce and Industry, and a Rajya Sabha Member of Parliament, in an interview with Senior Associate Editor Vikash Nanjappa said that the global financial crisis is at a critical stage.

He spoke to rediff.com, not long after he and other industrialists met Prime Minister Manmohan Singh to take stock of the grim financial condition of the globe. However, in an optimistic note he also added that the situation is bound to improve. Excerpts from the interview:

What stage is the global financial crisis in right now?

It is in a critical stage. However, confidence seems to be slowly improving.

Financial systems, across the globe, would require careful restructuring. Only then will investor confidence in the global economy return.

Do you see the situation improving or worsening?

I definitely see it improving. It would be slow, but steady.

Do you see a ray of hope in Obama? What do you expect the new American President to do?

I see tremendous respect, optimism and expectation for President (Barack) Obama's leadership. The revival of the US economy is critical to the revival of the global economy and confidence.

What are the difficulties that the Indian industry is facing?

The industry currently faces a crisis of confidence and growth. The last several quarters of tight monetary policy have weakened the industry and put it in a situation of being less capable of weathering this storm.

Apart from the rate cuts, recently announced by the Reserve Bank of India [Get Quote], what else does the industry expect from the government?

Primarily, we expect the government to stop this inflation management policy at the expense of growth.

Growth must become the principle focus of the government or else the damage down the road to our economy, which is in the midst of an unprecedented investment and expansion cycle, will be significant.

• Global Meltdown & Impact: Complete Coverage