"We are looking at certain investments in certain sectors," National Security Advisor M K Narayanan told reporters when asked about large inflows coming into India from China and middle-east countries through private equity players such as Blackstone.
Narayanan also said such inflows were natural in a globalised world. While Narayanan did not elaborate, official sources said a meeting of relevant security agencies would be held shortly in this regard.
Finance Minister P Chidambaram had also said on October 30 that India was facing a problem of huge capital inflows and needed appropriate regulations as well as risk management systems to avoid any potential shocks.
"Today in India, we face a problem of enormous capital flows. This is a completely new situation for us. We welcome capital but we must learn how to manage capital, how to absorb capital," he told industry captains at Fortune Global Forum.
India has seen foreign institutional investments surge to a record $17 billion this year. FIIs pumped in nearly $8 billion by the end of October after US Federal Reserve cut a key rate on September 18.
During April-July this fiscal, $6.6 billion FDI has come into India against $3.7 billion in the same period a year ago. Huge inflow of capital has pushed up forex reserves to $270 billion, and also led to a 12.5 per cent rise in rupee against the dollar in 2007.
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