Amid tainted ties, Modi minister says India ‘open’ to Chinese investments
India has taken strong steps against Chinese companies and banned the country’s social media and apps in the wake of border clashes in Ladakh in June 2020.
INDIAN minister of state for electronics and information technology (IT) Rajeev Chandrasekhar on Wednesday (26) told the Financial Times in an interview that the country is open to investment from China. His remarks came when the relations between the two Asian neighbours are not at their best, thanks to border clashes and other strategic rivalry.
New Delhi has also carried out crackdown on Chinese companies while stalling investment proposals from that country.
Speaking to the FT, he said India is “open to doing business with any company anywhere as long as they are investing and conducting their business lawfully and are in compliance with the Indian laws”, adding that India was “open to all investment, including Chinese”.
Chandrasekhar’s claim also comes at a time when India, one of the world’s fastest emerging economies, aims to capitalise on global supply chains in a pivot away from China, which currently has tense relations with the US, luring suppliers to multinational firms.
Relations between India and China have particularly nosedived since their soldiers got into physical clashes at the Galwan Valley in Ladakh, resulting in deaths on both sides. India banned several Chinese social media, lending and other apps, including TikTok over the last three years, citing concerns over data and privacy.
The Narendra Modi government has also started regulatory investigations against mobile phone producers from China, including Xiaomi, Oppo and Vivo, alleging that they breached tax, foreign exchange and other legal norms.
BYD, an electric vehicle (EV) maker from Shenzhen, also applied to set up a plant worth $1 billion in a joint venture with Megha Engineering and Infrastructures of Hyderabad, sources in the Indian government said. There were also reports that New Delhi rejected the proposal but the FT cited an informed source as saying that the application was “pending [and] still valid”.
Around the time in 2020 when Indian and Chinese troops clashed at the borders, New Delhi tightened its policy on foreign investments from the bordering nations that now require approval from the federal government. According to Chandrasekhar, the move did not pick China and applied to all countries “in the neighbourhood”, including Pakistan, Nepal and Bangladesh.
“The concept of trusted hardware, trusted equipment, a trusted electronics ecosystem all came to the fore around that time,” the minister was quoted as saying in the interview.
“I don’t think it’s anything very unique or to do with Galwan as much as it is a general trend of countries of the world waking up to the concern of having their backbone networks, tech ecosystems not necessarily trusted.”
India is also seeking to woo foreign investors as companies follow a “China plus one” strategy, something that the Narendra Modi government hopes will help it compete with rivals in high-tech sectors where it has fallen behind, including EVs and semiconductors.
However, the priority has found itself in contrast with the government’s tough stance on Chinese foreign direct investment.
Luxshare, a Chinese supplier to US multinational Apple, for instance, has sought approval to set up a factory in India with a domestic partner, the FT reported citing sources close to the company and officials of the Indian government.
In May, the manufacturer, which already has two plants in the South Asian nation, said that it would pursue further investment in India with “significant guarantees” of the business environment.
According to Indian officials, the project had not been approved yet.
