No Chinese company has received a green signal to invest in India and neither has any proposals been accepted, government sources said today, denying a report that many of China’s investment proposals were due. be approved after the easing of border tensions.
Only three proposals from Hong Kong-based companies were approved at a meeting on Jan. 22, the sources said. These proposals came from Citizen watches, Nippon paintings and Netplay. Of the three, two are Japanese and one is from an NRI, sources said.
As the border conflict escalated in June with the physical clash in the Galwan Valley in eastern Ladakh, in which 20 soldiers died for the country, the government changed the foreign direct investment policy. (IDE) in a clear message to Beijing.
“The Indian government has a strong FDI policy in place. The amended policy states that proposals from countries sharing borders with India must go through security analysis and only after analysis that the authorization can be given, ”the sources said, adding that the decision on the security assessment was up to the Interior Ministry.
“Whatever proposals are being prepared, they must be subject to a rigorous examination of the Chinese government’s stake, if any, and the security implications. Only then can they get the green light, ”said government sources.
Yesterday, the Reuters news agency reported, citing government and industry sources, that 45 investment proposals from China were on the verge of approval, possibly including those from Great Wall Motor and SAIC Motor Corp.
The news agency cited two government sources who it said had seen the list; the report states that most of the 45 proposals set for early approvals relate to the manufacturing sector, which is considered insensitive in terms of national security. The proposals have been delayed since last year after the government tightened controls on Chinese investment in the country amid border tensions, the report said.
According to Reuters, the government’s “change” in stance followed an “improvement in the border situation.”
Both sides have withdrawn troops, tanks and other equipment from hot spots of the protracted conflict.
The report also states that around 150 investment proposals from China worth more than $ 2 billion are on hold. Japanese and American companies channeling their investments through Hong Kong have also been caught in the crossfire as an inter-ministerial panel led by the Home Office increased scrutiny of the proposals, Reuters said.
Great Wall and General Motors (GM) made a joint proposal last year to seek consent from the Chinese automaker to buy the American company’s auto plant in India, in a deal that is expected to be assessed at about $ 250-300 million. SAIC, which started selling cars in India in 2019 under its UK brand MG Motor, has invested around $ 400 million of the nearly $ 650 million it has committed in India and would need approval to invest more.