The Government of India is reviewing nearly 50 investment proposals involving Chinese companies, according to a report in Reuters. Three sources have told the publication that this is in line with a new screening policy.
As per the new guidelines announced in April, all investments by companies in neighbouring countries need to be vetted by the government, both for new or additional funding. This has evoked immediate criticism from Chinese investors and Beijing, which has called the policy discriminatory.
Besides the new rules which are aimed at preventing opportunistic takeovers during the pandemic, industry executives told Reuters that the LAC clash between the two countries could further delay clearances.
The names of the companies whose investments are awaiting approvals, were not disclosed by the sources citing confidentiality.
One of the sources told Reuters that various Indian government agencies along with the Indian consulates in China, were in touch with investors and their representatives to seek more details on the proposals.
Alok Sonker, a partner at Indian law firm Krishnamurthy & Co, told Reuters that up to 10 Chinese clients had taken his views for investing in India, but were biding their time for more clarity on the policy outlook.
Uncertainty in timelines for the investment approval is dissuading both Indian and Chinese parties, from proceeding with business as usual, Sonker said.
Last week, the Centre had banned 59 Chinese apps following the border clashes in eastern Ladakh. These apps were banned in view of the emergent nature of threats, the Ministry of Information Technology said in a statement adding that as per information available, these apps are engaged in activities which are “prejudicial to sovereignty and integrity of India, defence of India, security of state and public order.”
The banned apps include Tik Tok, Shareit, Shein, Clash of Kings, Helo, Likee, Club Factory, Mi Community, UC Browser, CamScanner, among others.