Chinese companies may soon be able to invest in India again. The Indian government has recently changed its stance on investment proposals from China, approving several proposals after a long time.
Approval of 5-6 Chinese Proposals:
According to reports, the Indian government has recently approved some investment proposals from China, particularly in the electronics manufacturing sector. An inter-ministerial panel has given the green light to 5-6 such proposals. If true, this marks the first approval of Chinese investment proposals by the Indian government in years.
Change in Policy After 4 Years:
The policy change comes after about four years of strained relations between India and China, which began following the violent clash between their armies in the Galwan Valley in June 2020. After the clash, India had taken a tough stance on Chinese companies, increasing scrutiny on existing ones and putting new investment proposals on hold. The recent approval signals a possible easing of this tough stance.
Key Proposals Approved:
Among the proposals approved is one from Luxshare, a Chinese electronics manufacturer that also works as a vendor for Apple. Another proposal involves a joint venture between Micromax’s parent company, Bhagwati Products, and the Chinese company Huaxin Technologies, where the Chinese company will hold a minority stake.
Pressure from Electronics Manufacturing Industry:
The government has also approved some proposals from Taiwan-based companies that are either listed on the Hong Kong stock exchange or have significant investments there, as well as proposals from fully Chinese companies. Reports suggest that the electronics manufacturing industry pressured the government to approve some Chinese proposals to strengthen the supply chain in India.
