No Plans to Reconsider Policy on Chinese FDI: Piyush Goyal

New Delhi, Jul 30 (KNN) Commerce and Industry Minister Piyush Goyal reaffirmed on Tuesday that the Indian government has no plans to reconsider its current policy on foreign direct investments (FDI) from China, despite recent suggestions in the Economic Survey.

The pre-Budget Economic Survey, released on July 22, proposed seeking FDI from China to enhance local manufacturing and tap into export markets.

However, Minister Goyal clarified that the Survey's recommendations are not binding on the government and do not reflect any shift in policy.

"There is no rethinking at present to support Chinese investments in the country," Goyal stated during a press briefing.

In 2020, India implemented measures requiring government approval for FDI from countries sharing land borders with India, including China. This decision came amid heightened tensions following a military confrontation in the Galwan Valley in June 2020.

The Economic Survey had suggested that attracting Chinese FDI could be beneficial for India in light of the global ‘China plus one’ strategy.

It argued that this approach could potentially boost India's exports to markets such as the United States and Europe.

Despite these recommendations, China's current share in India's total FDI equity inflow remains minimal, standing at just 0.37 per cent (USD 2.5 billion) from April 2000 to March 2024.

While FDI from China has been limited, bilateral trade between the two nations has seen significant growth. China emerged as India's largest trading partner in 2023-24, with two-way commerce reaching USD 118.4 billion.

However, the trade balance heavily favours China, with India's trade deficit widening to USD 85 billion in the last fiscal year.

The government's stance on Chinese investments comes amid ongoing border tensions and broader geopolitical considerations.

India has previously taken measures such as banning Chinese mobile apps and scrutinising investment proposals from Chinese companies.

As the situation evolves, the government's approach to Chinese investments and economic relations remains a topic of significant interest and debate in India's policy circles.

(KNN Bureau)