Following a meeting with Union Finance Minister P Chidambaram, the foreign institutional investors on Thursday expressed confidence in the economic reforms process of the Congress-led United Progressive Alliance government and are expected to increase their investments in India.

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"Our interaction with the finance minister has allayed fears and FIIs are comfortable with the policies and reforms process of the new government," DSP Merrill Lynch chairman Hemendra Kothari told newspersons in Mumbai.

"We expect FIIs to react positively," he said after an hour-long meeting of FIIs' representatives with Chidamabaram.

Kothari said the strengthening of the mutual funds for better investment climate also figured during the discussions.

Kotak Mahindra Bank vice-chairman Uday Kotak said the meeting was an excellent communication with a clear message that reforms would move forward.

J P Morgan Chase managing director Dominic Price said the interaction was "positive and encouraging and we hope the investment climate will improve substantially."

Chidambaram, who had met stockbrokers and bankers on Wednesday, already had a meeting with the Reserve Bank of India Governor Y V Reddy and is due to interact with the heads of UTI, LIC and GIC and leading industrialists before leaving for Delhi later in the day.