India-China border chill may thaw slowly, FDI bar to stay

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Subscribe to enjoy similar stories. New Delhi: Despite the recent easing of tension between New Delhi and Beijing, the ghost of the 2020 Galwan clash is likely to hover for a while, as the implications of the border disengagement between the two countries is likely to unravel only slowly.

Some measures taken by India against Chinese businesses may be scaled back, but other restrictions such as import of finished goods and caution on foreign direct investments (FDI) from the eastern neighbour are likely to stay, according to persons privy to discussions in the government. One of the persons quoted above said import of equipment and machinery from China for India’s manufacturing sector will remain smooth.

“Quicker processing of visas for technicians from China is expected; already, streamlining of business visas to technicians from China employed by our factories availing of production linked incentives is underway," this person said, requesting to not be named. However, the person added that FDI into India will continue to be evaluated on a case-by-case basis, as per Press Note-3, which requires all investments from countries that share a land border with India to be cleared by the Centre.

At the same time, a senior commerce ministry official said on condition of not being named, “There is a possibility that the flow of FDI from China, which has been stalled for an extended period, may see improvement. The resolution of border issues between the two nations is also likely to ease trade barriers, benefiting both the economies." Queries emailed on Wednesday to the ministries of commerce, finance and to the Prime Minister’s Office seeking comment remained unanswered at the time of publishing.