"Our main goal in the immediate future is to qualify for the 2008 Olympics in Beijing. Our team has the talent and potential and if we perform to our ability, then anything is possible," Carvalho said on the eve of the six-nation event.
However, Carvalho reiterated that the focus presently is on doing well and winning the Champions Challenge.
"We need to take one step at a time and so, our focus now is fully on this tournament," Carvalho said in an exclusive interview.
A sense of quiet confidence pervades the Indian team and underlining the mood was Carvalho.
Having replaced Vasudevan Baskaran earlier this year in the wake of the disastrous 2006 World Cup campaign, Carvalho felt that his team was in good shape to take on the challenge here.
"The 10-day training stint in Germany before we came here was extremely helpful," he said.
"We played four practice games against local clubs and won them all. That has put the players in good frame of mind. We made a few changes after the Azlan Shah tournament and I feel, the team is much stronger now than we were in Ipoh."
The eight-nation Sultan Azlan Shah Cup tournament in Ipoh, Malaysia, was the first international outing for India and Carvalho.
A bronze medal behind Australia and Malaysia signaled a revival of fortunes for Indian hockey that was written off after the World Cup.
Though the 1-0 semi-final defeat to a young and inexperienced Malaysia in Ipoh still rankles, Carvalho confessed that the overall performance of the team did exceed his expectations.
"Honestly, I was rather unsure how things would pan out in Ipoh. After all, it was my first tournament as the Indian coach and so it was for the young team.
"But now, I am feeling far more confident, specially after the way we played in the practice games in Germany earlier this month," he said.
The Indians won all the four matches with score lines of 6-0, 6-2, 4-2 and 7-2. The last practice game was played at the Warsteiner Hockey Park in Monchengladbach, the scene of India's 11th place finish at the 2006 World Cup.
"Yes, these matches were against club sides, but it gave our youngsters a lot of exposure in terms of playing against European style of play," the coach said.
"Though we won all the matches comfortably, the going was not easy. Some of the games were played in rain and cold weather conditions.
"We also had to break through tight defences and also play at a good pace right through."
The practice games also helped India experiment with various permutations and combinations besides fine-tuning strategies, he said.
"We worked out some combinations as I wanted to evaluate not just the fitness of the players, but also their individual form and ability."