Majority of Indian corporates, surveyed by industry body Assocham, are looking at overseas destinations for investment in view of high inflation, rising interest rates and virtual "policy paralysis".
"Despite healthy economic growth in the last fiscal, several companies are concerned over high inflationary pressures, rising interest rates, poor infrastructure and policy paralysis leading to delays in decision-making," it said.
The chamber said it has surveyed over 500 leading corporates.
Over 85% of respondents said the bureaucrats are delaying the decision-making process due to the fear of corruption scandals, Assocham said.
"If this continues, there will be serious doubts over 9% GDP growth being achieved this financial year," Assocham secretary general DS Rawat.
Besides, the respondents said the credit off-take from banks has slowed down. "This clearly indicates that the existing investments are being put on hold and fresh investments are not coming in," Rawat said.
Further, the chamber said, the strong performance in export sector is also unlikely to be sustained in the coming months.
"With the Duty Entitlement Passbook (DEPB) Scheme coming to an end on September 30, about 60% of exporters fear that they will be under pressure to maintain their competitiveness in global markets," it said.
The country's merchandise exports grew 46.4% to $29.2 billion in June 2011, year-on-year.
Rising cost of raw materials is also impacting performance of exporters, the chamber said.
Majority of respondents said they are likely to increase their products prices in the next six months as they are left with no other option, it added.