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India likely to maintain ban on Chinese investments amid ongoing economic discussions, says CEA V Anantha Nageswaran
India is unlikely to lift its ban on Chinese investments soon, according to Chief Economic Adviser V. Anantha Nageswaran. He noted the need for mutual understanding and highlighted ongoing discussions about the significant trade deficit between the two nations.
Chief Economic Advisor (CEA) V Anantha Nageswaran told reporters that India is not soon expected to lift the ban on Chinese investments into the country, Reuters reported on February 11.
“It requires both sides to understand mutual dependence and benefits. I don't think it is something that you'll expect to see immediate results because both the sides are crossing the river by feeling the stones,” Nageswaran told reporters in Mumbai.
No Changes to Policy on Chinese Investments
India has tightened its scrutiny of investments from Chinese companies since 2020, as relations between the two nuclear giants have soured after clashes between their soldiers on their largely undemarcated Himalayan frontier left 20 Indian and four Chinese soldiers dead in June 2020.
Nageswaran said that India has triggered a conversation with China to discuss the growing trade deficit between the two countries.
India is among the top three countries with the largest trade imbalance with China, with a trade deficit of $93 billion to $95 billion, he said.
List of Sectors for Chinese Investments?
In July 2024, Mint cited sources to report that the Centre may consider preparing a list of sectors and industries where Chinese investments may be allowed, provided these help indigenise manufacturing and do not pose a security risk.
Once identified, investments may be permitted in these sectors without additional scrutiny under the Press Note-3 of the Foreign Direct Investment (FDI) regulation applicable to neighbouring countries, the report added.
“This is an idea which has been floated. But, there hasn't been any decision taken in this regard. As things stand, there is continuously a security threat from China which hasn't gone away. However, there are some industries/sectors where security threats may not be present, and accepting investment from China may help us indigenise our production,” the first person mentioned above said, requesting anonymity.
(With inputs from Reuters)
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Business NewsEconomyIndia likely to maintain ban on Chinese investments amid ongoing economic discussions, says CEA V Anantha Nageswaran
First Published:11 Feb 2025, 02:44 PM IST
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