China has urged India to allow investments. In April 2020, the Indian government made it mandatory for foreign investments from countries that share land borders with India to get prior approval. This was done to curb opportunistic takeovers of local companies amid tensions with China. As a result of this policy, Chinese investment proposals have remained stalled for some time now.
In May 2022, Chinese Foreign Minister Wang Yi visited India and met with Indian Prime Minister Narendra Modi. During the meeting, Wang urged India to "change its restrictive policies and practices" when it comes to Chinese investment proposals. He called for the Indian government to create a level playing field for foreign companies regardless of nationality.
India has not yet responded to China's request. However, it is likely that the Indian government will consider it carefully, as it is keen to attract foreign investment to boost its economy.
Why China might be interested in investing in India:
- India has a large and growing population, which provides a potential market for Chinese goods and services.
- India has a young workforce, which is seen as being more adaptable to new technologies.
- India has a rapidly growing economy, which offers opportunities for Chinese businesses to expand their operations.
Risks associated with investing in India, such as:
- The political and economic relationship between India and China is sometimes tense.
- China's biased support to terrorist nation: Pakistan
- There are concerns about intellectual property theft in India.
- The Indian government has a history of imposing protectionist measures on foreign businesses.
Overall, it is likely that China will continue to urge India to allow investments. However, the Indian government will need to weigh the risks and benefits carefully before making a decision.
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