Foreign Direct Investment (FDI) proposal has been kept on hold for now by the Ministry of Home Affairs for the security clearance. As many as 175 proposals are awaiting approvals. Major firm whose FDI proposals await clearance include Great Wall Motors, petrochemical major hengli and Foton China.
“The basic objective behind the national security clearance is to evaluate potential threats, visible or embedded, in proposals received by the home ministry and to provide a national risk assessment. After a new FDI policy by the department for promotion of industry and Internal Trade (DPIIT), a detailed review of the names of promoters, owners and directors are conducted despite a self-declaration,” The Economic Times reported citing an unidentified official.
In the month of April this year the government indroduced new rules for FDI that stated that any country that shares land borders with India must get clearance for investment in the country- even for the ones in the autometic route. The announcement is for “opportunistic takeovers or the acquisitions of Indian companies due to the COVID-19.
The scrutiny and security has been extended after the incident of Galwan valley which led to death of 20 Indian soldiers. The border situation has remained tense between the two Asian neighbour ever since.
The China’s largest SUV maker Great Wall Motors had in January acquired General Motors’ Talegaon factory in January for Rs 950 crore. It was part of this Great Wall Motors $1 billion investment in India’s SUV market. Other firms are like Changan, Chery and Haiman are also expected to keep a close eyes on the Indian Government decision on Great Wall Motors, the daily had reported recently.
