Jilian Consultants Co., Ltd.
Jilian Consultants Co., Ltd.

Indo-chinese Strains Disentangles As India Set To Clear New Investment Proposals From China

Overseas Corporate Compliance Program

As Indian and Chinese forces retreat from the Pangong Tso area of Ladakh region last week after the nine months long standoff, the two countries seem poised to ease the gelid tensions. This is deemed to be the worst clash between the neighboring countries
since 1962.

Midst this strain, the Indian government formulated various foreign investment policies against China. One such was blocking the nation from participating in
government tenders that impelled Chinese firms to seek approvals, also banning many Chinese apps, thereby slowing investment flows from China.

However post the disengagement of forces from Ladakh region, three Indian government officials having knowledge of the subject matter said that India is set to clear some new investment proposals facilitating the ease of conflict.

One of the official mentioned, “We’ll start giving approvals to some greenfield investment proposals, but will clear those sectors which are not sensitive to national security”.

Investment for stakes of up to 20% in the “non-sensitive” sectors may also revert to the “direct route” allowing investment from Chinese firm without much government scrutiny.

Among the delayed investment proposals worth more than $2 billion, was the much talked about acquisition of a General Motors’ plant in India by China's Great Wall Motors’.

Although the officials have insisted to keep the details discreet as the discussions were private, the Prime Minister’s office did not respond to mails, calls or messages seeking comments over the issue.