By Ethirajan Anbarasan BBC Tamil service

Chidambaram stressed the need for foreign investment

He told a meeting in London of foreign investors and executives from financial institutions that India's new governing coalition would sort out problems with its communist supporters through a process of dialogue.

Communist parties are the biggest ally of India's new Congress-led coalition government.

"Left parties are extending valuable support to us, so it is not correct to say that confidence of the foreign investors will be damaged because of them," Mr Chidambaram said.

He said a recent controversy over the left parties' objection to having experts from multi-lateral institutions in advisory groups of the country's planning commission has been sorted out through dialogue.

Apprehensive

Last month the planning commission, which formulates five-year economic plans, was forced to drop outside experts after left-wing parties objected to foreign consultants being a part of the groups when "there were enough qualified Indian economists to do the job".

The controversy grabbed the attention of the foreign investors who were apprehensive about the possible influence of the left parties in the new government's economic policies.

The left parties also object to privatising profit-making public sector units and increasing foreign investment in aviation, telecom and insurance sectors.

But Mr Chidambaram said India would be removing limits on foreign investment in those three sectors over a period of time and this will be done through a process of dialogue with the left partners.

He said his government would review the limits on investment in aviation later this month.