Government panel to vet Chinese investments

Tribune News Service

New Delhi, February 22

The government has set up a coordination committee comprising officials from the Ministries of Home, External Affairs and Commerce besides the Niti Ayog for case-by-case vetting of Chinese foreign investment proposals that have been stuck for nearly a year.

According to reports, about 150 Chinese foreign investment proposals worth over $2 billion have been stuck, including those routed by Japanese and US companies through Hong Kong.

The plan is to divide the proposal into sensitive and non-sensitive categories. There could be faster clearances for proposals from automobiles, electronics, chemicals and textiles sectors while the ones in sensitive categories such as data generation and finance may see slower clearances.

A proposal that is stuck is the US giant General Motor’s (GM) plant to a Chinese company. Chinese company Great Wall and GM had jointly sought permission for the sale of the car plant.

Great Wall plans to invest $1 billion in India and start selling cars from this year. Another Chinese automobile company SAIC, which owns the British brand MG Motor, plans to invest another $250 million.

In April last year, the government had amended the foreign direct investment (FDI) policy to keep out China. At that time the government had said the approach was in line with that of  Germany, Italy and Australia which were changing their FDI laws to safeguard industries that were hit by the Covid pandemic and were ripe takeover targets.

In India, the government kept out Chinese companies by stipulating that all countries that share borders with India must take approval before investing.