No Change in Policy: DPIIT Secretary clarifies India’s stance on Chinese FDI

India’s policy on foreign direct investment (FDI) from China remains unchanged, according to Rajesh Kumar Singh, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT). Singh addressed recent speculation about a potential shift in policy, emphasizing that Chinese investments will continue to undergo rigorous scrutiny on a case-by-case basis.

Key Points:

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  • No Policy Shift: Singh confirmed that there is no change in India’s stance regarding Chinese FDI. The policy of increased scrutiny remains in place.
  • Press Note 3: Introduced on April 22, 2020, Press Note 3 mandates thorough checks on investments from countries sharing a land border with India, including China, to prevent opportunistic takeovers.
  • Current Situation: Singh stated that India has not blocked FDI proposals from China but has applied heightened scrutiny. Approximately 30-40% of applications from land border countries, including China and Hong Kong, have been approved over the past two years.

Speculation and Clarification:

  • Economic Survey 2023-24: The suggestion from Chief Economic Advisor Anantha Nageswaran’s Economic Survey to increase Chinese investments to address the trade gap sparked discussions about a policy shift.
  • Online Portal for E-Visas: The recent establishment of an online portal for e-visas for Chinese technicians has also fueled speculations. Singh described the Economic Survey’s suggestion as merely an academic exercise and not indicative of a policy change.

Official Statement:

Singh emphasized that the scrutiny of FDI from China will continue as per the existing guidelines, ensuring that there is no complete blockade or abrupt policy shift. He encouraged viewing the discussions around the Economic Survey as exploratory rather than indicative of imminent policy changes.