The Indian government is reportedly considering easing investment restrictions on certain Chinese firms. This potential policy shift is expected to provide a significant boost to India’s manufacturing sector.
According to a report by Bloomberg, discussions are underway to possibly grant exemptions to Chinese companies in high-tech sectors such as solar modules and critical minerals.
Ministry of Commerce and Industry, along with other security-related departments, is currently examining the feasibility and implications of such exemptions.
This consideration follows the recommendations outlined in the Economic Survey 2024, authored by Chief Economic Adviser V. Anantha Nageswaran and his team.
The survey advocated for increased Chinese investments as a means to transform India into a global manufacturing hub.
Nageswaran proposed two potential pathways: ramping up imports or attracting more foreign direct investment (FDI) from China, favoring the latter to address India’s significant trade deficit with China and enhance domestic technical capabilities.
However, the historical context of India-China relations presents a complex backdrop. Following the deadly border clashes in 2020, the Indian government imposed stringent restrictions on Chinese investments. These included tighter investment rules, a ban on numerous Chinese apps, and a slowdown in visa approvals, significantly straining economic ties between the two nations.
