The strangest policy notification from govt : says foreign investment proposals from countries sharing borders with India will not get automatic approval as per existing guidelines. This is clearly targeting China because Pakistan/Bangladesh never had access to automatic route.
If idea is to discourage China from buying Indian companies cheap then restrict takeovers. Why prevent them from bringing FDI in greenfield projects via existing automatic route. It is unprecedented that the world’s 2nd largest economy is being put in a special category of FDI.
If I know how this govt’s mind works it might be using the new FDI barrier against China as a bargaining chip to get something from Xi Jinping. Otherwise such a draconian measure against the 2nd largest economy cannot be easily explained. We will know soon what the real story is!
It is possible that India will keep this FDI barrier against China until India’s economy is up and running. China has already begun opening up. If it is a temporary measure one can understand its rationale. In long run it can be harmful as Indian cos also invest big in China.
