India is all set to clear some new investment proposals from China in the following weeks. This follows, government sources said, the thawing of frosty relations between the two neighbouring countries as troop withdrawals along the LoAC in eastern Ladakh had begun.
Last week, India and China began disengagement from the Pangong Tso area in the Ladakh region of the western Himalayas, following a nearly nine-month-long imbroglio after the worst clash between the neighbouring countries since 1962.
At the height of the standoff, India framed various policies targeting China, including blocking the northern neighbour from participating in government tenders, compelling Chinese firms investing in India to seek approvals and banning 59 Chinese apps.
The foreign investment rule change by the Indian government mandated that investments from any company in a country that shared a land border with India would require government approval, markedly slowing investments flows from China.
The rule change had put in limbo over 150 proposals from China worth more than $ 2 billion, hurting the plans of Chinese companies in India.
Among the proposals delayed was China’s Great Wall Motors’ acquisition of a plant of General Motors in India.
“We’ll start giving approvals to some greenfield investment proposals, but we will only clear those sectors which are not sensitive to national security,” one of the officials said.
The officials, who asked not to be named as the discussions were private, did not divulge details of the proposals they had planned to clear in the coming weeks.
The Prime Minister’s Office did not immediately respond to an email seeking comments whereas the Ministry of Home Affairs did not respond to an email, call or message.
The government will look to clear some other brownfield projects ― new investments in existing projects ― that are not a risk to national security after the first round of clearance to new investments, the officials said.
The government is considering allowing some investment from Chinese firms in certain sectors through the “automatic” route or without government scrutiny, said the officials.
The officials said investments for stakes of up to 20% in “non-sensitive” sectors might go back to the automatic route for countries with which India shares land borders.