Departments advised against blanket approval of Chinese FDI
- In Reports
- 09:24 PM, Jun 27, 2024
- Myind Staff
Security establishments in India have cautioned against granting blanket approval to foreign direct investment (FDI) proposals from China, citing concerns over the past corporate behaviour of Chinese companies in the country.
According to a report citing sources familiar with the matter, there is a recommendation to implement a stringent risk assessment framework before easing the restrictions imposed during the Covid-19 pandemic.
A report says the proposal includes the establishment of robust IT tools and databases for ongoing review and monitoring of FDI from countries viewed as concerning. Sources emphasised the need for a time-bound mechanism to process cases once such a system is operational.
Emphasising national security as paramount, sources cautioned against unrestricted FDI from these countries. They suggested that while desirable investments contributing to technological advancements and domestic value addition should be welcomed and approved, a balanced approach was crucial.
Despite restrictions imposed in 2020 and subsequent regulatory scrutiny, Chinese investments continue to enter specific sectors, according to sources. The sources emphasised that improving the investment climate requires enhancements in both pre-entry mechanisms and support for investors in establishing their operations after bringing in funds.
The discussions highlight India's cautious approach towards approving FDI from China, which reflects its ongoing efforts to strike a balance between economic interests and national security priorities.
This cautious stance underscores India's commitment to carefully evaluating and regulating investments from China, aiming to mitigate potential risks while also considering the economic benefits such investments may bring. The focus remains on ensuring that any approvals align with India's strategic objectives and safeguarding its sovereignty and security concerns amidst evolving global economic dynamics.
Image Source: Business Today
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