NEW DELHI, 30 Jul: Commerce & Industry Minister Piyush Goyal on Tuesday said there is no rethinking in the government to support foreign direct investments (FDI) from China as was pitched by the economic survey recently.
He said that it is a report that always speaks about new ideas and gives out their own thinking.
The survey, he said, is not at all binding on the government and there is no thinking on supporting Chinese investments in the country.
“There is no rethinking at present to support Chinese investments in the country,” the minister told reporters here.
In 2020, the government made its approval mandatory for FDI from countries that share landed border with India.
Countries which share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan. The minister was responding on a pitch made by the pre-budget economic survey on 22 July for seeking FDI from China to boost local manufacturing and tap the export market.
As the US and Europe are shifting their immediate sourcing away from China, it is more effective to have Chinese companies invest in India, and then export the products to these markets rather than importing from the neighbouring country, the survey said.
India faces two choices to benefit from the ‘China plus one strategy’ – it can integrate into China’s supply chain or promote FDI from China.
“Among these choices, focusing on FDI from China seems more promising for boosting India’s exports to the US, similar to how East Asian economies did in the past. Moreover, choosing FDI as a strategy to benefit from the China plus one approach appears more advantageous than relying on trade. This is because China is India’s top import partner, and the trade deficit with China has been growing,” it added.
China stands at the 22nd position with only 0.37 per cent share (USD 2.5 billion) in the total FDI equity inflow reported in India from April 2000 to March 2024.
The ties between the two countries nosedived significantly following the fierce clash in the Galwan valley in June 2020.
India has been maintaining that its ties with China cannot be normal unless there is peace in the border areas.
Following these tensions, India has banned over 200 Chinese mobile apps like TikTok, WeChat, and Alibaba’s UC browser. The country has also rejected a major investment proposal from electric vehicle maker BYD. (PTI)
