India-China Border Row: Chinese Investment in India decreases as Government tightens its grip

Investment in the country has come down following the restrictions imposed by the Indian government on Chinese investment after tensions at the border. However, Indian companies are placing more emphasis on funds coming from other countries.

By Harkirpal Singh, Updated : Feb 22, 2021 13:14 IST
India-China Border Row: Chinese Investment in India decreases as Government tightens its grip
India tightens its grip on China amid border standoff

After continuous tensions along the border with China, the results of restrictions on Chinese investment by the government are beginning to show. Due to these restrictions, investment from China has come down considerably in the last year.

A report in the English newspaper 'The Indian Express' quoted the data of Venture Intelligence stating that Private equity and venture capital funding from China and Hong Kong to India declined to $ 1.05 billion. Whereas in 2019 it was $ 3.05 billion.

FDI has also come down from there due to the decisions taken by the Indian government due to tension with China. In the six months before September 2020, FDI from China decreased to just $ 55 million. It is the lowest in the last three years (before September).

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The highest FDI from China came between October 2017 to March 2018. During that time it had increased to $ 247 million. From April 2000 to September 2020, the country received FDI from China totaling $ 2.43 billion.

FDI coming from Hong Kong has also declined. This was the 12th major source of FDI in the six months before September 2018. But at the end of September 2020, it reached the 14th position. In April last year, the government tightened the rules regarding investment from China.

Under this, the government had approved an approval route instead of an automatic route. This has increased the concern of Chinese investors. Not only Chinese investors but also those doing business from China are not increasing their business plan.

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The government had banned many apps with Chinese links. These included the popular app TikTok, CamScanner, PubG, and Sheen.

Indian start-ups used to get a lot of investment from China, but due to the strictness of the government after the tension on the border, now the start-ups here are also trying to raise funds from investors from other countries. Indian car companies and Chinese-made components are also working on their new strategy.

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