Is New Delhi about to ease up on Chinese investment?
DPIIT) has taken note of the recommendations of a high-level Niti Aayog committee that suggested a softer stance on restrictions on investments from China,” one of the two people cited above said on the condition of anonymity. “Some rounds of inter-ministerial consultations have already been held in this regard, with a recent such consultation taking place in December,” the person said.The shift in thinking marks an emphasis on effective control rather than mere equity holding, as India seeks to balance the need for capital inflows with security considerations.
While India remains one of the fastest-growing major economies, FDI inflows have been volatile, peaking at $84.8 billion in FY22 before slipping to roughly $71 billion in the subsequent two years. By loosening the taps for Chinese capital, India aims to hit a target of $100 billion in annual FDI, a figure seen as essential for its industrial manufacturing ambitions.The DPIIT is currently examining a Tencent investment in Flipkart, which may serve as a template for future decisions and a policy recalibration, the second person said.
The Chinese technology major holds around 5% in the Indian e-commerce platform owned by Walmart, but has no management control or board representation. The DPIIT hopes to codify a standard that allows passive Chinese capital without compromising national security based on its scrutiny of the Tencent-Flipkart investment.
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