Security Departments asked to approach blanket approval of Chinese FDI with caution
The security establishment of India is recommending a non-enthusiastic approach to any unbounded and blanket approval of FDI proposals originating from China considering the past behaviour of Chinese entities in the country. A system of risk assessment must be implemented before lifting the restrictions for Chinese FDI that were imposed during the COVID.
Notably, there must be review and monitoring including through probable Information Technology tools and databases regarding FDI from the countries of concern. Once a system is put in place, the disposal of cases should be done through an efficient time-bound process, the sources said.
While demanding complete freedom to FDI from the countries of concern, national security cannot be compromised, sources said. Any cogent investments that should be able to foster new technologies and domestic value addition should be encouraged and approved, sources suggested.
The restrictions imposed on Chinese FDI in 2020 and an investigation by agencies are not slowing down investments from China in some sectors. They also mentioned that pre-entry mechanisms alone do not contribute to the improvement of the Investment climate in the country.
It requires helping the investors in their activities of business set up to facilitate FDI after they bring their investment money into the country.
