India changes FDI policy to block threat of takeovers: Chinese Money

The government has announced stringent restrictions on foreign direct investments (FDIs) from countries sharing land borders with India, especially the recent episode by Chinese companies functioning in India. The sources said, within China, the Chinese private sector, and particularly tech firms, work closely with the government and the Communist Party in pursuing many of its goals at home.

It is quite obvious true that more Chinese companies investing in India ,as India attempts to gain market access in China for its information technology, agricultural and pharmaceutical industries have hit a wall for over a decade.

As per the sources, actual Chinese investment in India is at least three to four times higher than the official Indian figure. With this China has emerged as one of the fastest-growing sources of Foreign Direct Investment (FDI) into India. Indian statistics could record, those are the direct investments came from mainland China, but a majority of Chinese overseas direct investment flows through tax havens such as Hong Kong. China to be one of India’s top 10 foreign investors.

Another report says, official figures underestimate the amount of investment as they neither account for all Chinese companies’ acquisitions of stakes in the technology sector nor investments from China routed through third-party countries, such as Singapore. For instance, a $ 504-million investment from the Singapore arm of the mobile firm Xiaomi would not figure in official statistics because of how investments are measured, the report said.

The total amount of current and planned Chinese investment in India has crossed $26 billion (around Rs 1,98,000 crore), with the private sector in China and provincial governments emerging as important interest groups in shaping China’s diplomacy with India, a study released by Brookings India has said.

To see this type of aggressive move, on Saturday, the government said its approval is mandatory for FDI by neighbouring countries, in a move that is seen as curbing “opportunistic” takeovers.

China is also the biggest trading partner of India, and India the largest project-contracting market for Chinese companies in South Asia. Another fact is, China's economy is five times bigger than India's. In the past few years, with growth slowing at home, China is producing more steel, cement and machinery than the country needs. And as it looks to developing countries in Asia to keep its economic engine going, Chinese companies have been courted by India to bridge its infrastructure deficit.

India changes FDI policy to block threat of takeovers: Chinese Money: