top of page
  • InduQin

India clears 80 FDI proposals involving Chinese entities

The Indian government has approved 80 foreign direct investment proposals from Chinese entities as of June 29, according to data revealed under the Right to Information (RTI) Act.

The Department of Promotion of Industry and Internal Trade (DPIIT) said that it received FDI proposals from 382 Chinese entities in the aftermath of India imposing restrictions on investments from countries that share land borders with it, according to a report by Economic Times

Following a skirmish between Indian Army and People’s Liberation Army troops at the Ladakh border, India made a prior government approval and security clearance mandatory for investment proposals from countries sharing land borders with India. Ever since the DPIIT has been vetting applications on a case-by-case basis. The report added that the government is taking its sweet time to clear applications after due diligence; also, mostly the proposals being allowed involve the acquisition of a minority stake that does not lead to a change of ownership. Manufacturing sector proposals are getting faster approvals than others, some of which haven’t elicited a response for over a year. The report said that government did not disclose how many applications were rejected and the quantum of investments that will come into India through 80 approved applications. Investor profile is closely monitored while vetting applications and the government. Market participants said government agencies are extra careful in vetting applications from investors deemed close to Beijing. Also, proposals involving board seats for Chinese entities are not viewed favourably. A person who handles FDI applications told Economic Times that proposals which involve setting up physical infrastructure carry lower risk than those seeking digital assets as it is easier to defend physical assets in adverse cases. While proposals have increased, the government introduced new measures to limit Chinese control in Indian corporates.


1 view0 comments
bottom of page