New Delhi: Just days after the Centre amended the Foreign Direct Investment (FDI) policy to check opportunistic takeovers of Indian companies amid the Covid-19 pandemic, China on Monday criticised the move and said that it violates the World Trade Organizations principle of non-discrimination.
In a statement, Chinese Embassy spokesperson in India, Ji Rong, said that the Indian government’s decision to tweak FDI norms goes against the trend of liberalization and facilitation of trade and divestment.
She noted that the Department for Promotion of Industry and Internal Trade’s (DPIIT) revised FDI policy, making it much difficult for companies from countries sharing land border with India, including China, to invest in the country.
The spokesperson said that facing the economic downturn caused by COVID-19, countries should work together to create a favorable investment environment to speed up the resumption of companies’ production and operation.
“The additional barriers set by Indian side for investors from specific countries violate WTO’s principle of non-discrimination, and go against the general trend of liberalization and facilitation of trade and investment. More importantly, they do not conform to the consensus of G20 leaders and trade ministers to realize a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open,” she said.
“We hope India would revise relevant discriminatory practices, treat investments from different countries equally, and foster an open, fair and equitable business environment,” Ji Rong added.
Outlining Chinese investments in India, the statement said that as of December 2019, China’s cumulative investment in India has exceeded $8 billion, far more than the total investments of India’s other border-sharing countries.
Outlining the significance of Chinese investments, the spokesperson said: “Chinese investment has driven the development of India’s industries, such as mobile phone, household electrical appliances, infrastructure and automobile, creating a large number of jobs in India, and promoting mutual beneficial and win-win cooperation. Chinese enterprises actively made donations to help India fight COVID-19 epidemic.” In a tweet, the spokesperson said: “#Chinese investment supports #India’s industry development, creates jobs & promotes win-win cooperation. Our companies actively helped India fight #COVID19. Hope India revise the discriminatory practices and foster open, fair and equitable business environment.” The impact of the policy on Chinese investors is clear, it noted, inferring that the amendment would hurt the Chinese companies most.
Last week, the Centre decided to put all FDI proposals from countries sharing border with India under the government approval route. Companies whose beneficial ownership also lies in such countries will have to undergo government scrutiny for any change in foreign holding, as per the revised norms.