KOLKATA: India’s decision to tighten its FDI norms has drawn sharp criticisms from China. So far, China’s cumulative investment of ₹62,000 crores in India far exceeds the total of its neighbours, put together. On Monday, a Chinese embassy spokesperson stated, “The additional barriers set by Indian side for investors from specific countries violate WTO principles of non-discrimination, and go against the general trend of liberalization and facilitation of trade and investment.”
Earlier this week, several west European countries including Germany, Italy and Spain tightened their foreign direct investment (FDI) rules to prevent Chinese firms from taking over their companies which are facing slumping sales, during this time of global pandemic due to COVID-19.
On Saturday, Indian Government stepped up its scrutiny of investments, as well, by making prior approval mandatory for foreign investments from an entity of a country that shares a land border with India. Former FDI rules stated that only Bangladesh and Pakistan had to seek the government route to invest in any Indian sector.
A statement issued by the Department for Promotion of Industry and Internal Trade (DPIIT), further added, “However, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the government route.” News media widely saw this as a move to stave off “opportunistic takeovers” of Indian businesses, by Chinese firms, during these tumultuous times for our country.
In the statement, spokesperson of the Chinese embassy Ji Rong added,”The impact of the policy on Chinese investors is clear…We hope India would revise relevant discriminatory practices, treat investments from different countries equally, and foster an open, fair and equitable business environment.”