INDIA-CHINA-INVESTMENT: India to keep investment restrictions on border countries
New Delhi: India will continue to ban investment from countries with which it shares a land border, the finance minister said days after the South Asian country signed an agreement with China over its disputed Himalayan border.
The deal marks a possible end to a four-year military standoff and fosters stronger political and business ties between the Asian giants. These ties have been strained since a deadly border clash in 2020 slowed exchanges of capital, technology, and talent.
“I cannot blindly receive foreign direct investment because I want money for investment, forgetful or unmindful of where it is coming from,” Nirmala Sitharaman told a Tuesday gathering at the Wharton Business School in the United States.
This dispute has stagnated ties between the world’s two most populous nations at a time of booming demand for electric vehicles, semiconductors, and artificial intelligence, key growth areas offering opportunities for cooperation.
In 2020, India stepped up vetting and security clearances to scrutinize investments from companies based in neighboring countries, but it did not mention any nations.
The move, widely viewed as a step to prevent Chinese companies from making takeover or investment offers, effectively kept billions of dollars away from carmakers BYD and Great Wall Motor.
At the same time, bureaucratic red tape weighed down Indian companies with any Chinese shareholders.
Indian imports of goods from China, however, have jumped 56% since the 2020 border clash, almost doubling New Delhi’s trade deficit with Beijing to $85 billion.
