India to China on investment; ‘There is no plan from the Modi government to…’, says source

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• ‘We don’t need your money’: India to China on investment; ‘There is no plan from the Modi government to…’, says source

India wants to explore opportunities for economic cooperation with China.

New Delhi: India and China’s relations are going through ups and downs. Recently there has been some improvement in the relations between the two countries. It is another matter that the government is not in the mood to lift the ban on investment coming from China. Sources have given this information. According to them, there is no plan from the Modi government to review Press Note 3. Press Note 3 says that investment coming from countries sharing land border with India will have to get approval from the government in every case.

What is India’s response to China?

This is a clear message for the Dragon. It shows that for India its security is of paramount importance. Until it is assured, it cannot take the risk of opening the doors for China.

According to a source, this is still a very early stage. There has been no talk so far about relaxing Press Note 3. At present, the possibility of doing so is also low. Finance Minister Nirmala Sitharaman had indicated the need for more access and dialogue between the two countries for economic cooperation. But, at the same time, she also stressed on exercising ‘caution’. In a program, she said that both the countries want to have more dialogue with each other for economic cooperation. But this has to be done carefully.

When was India’s FDI policy changed?

In April 2020, the government changed the Foreign Direct Investment (FDI) policy. This change was made through Press Note 3 of 2020. According to this, if a company is from a country sharing land border with India or the owner of that company lives in such a country or is a citizen of that country, then it will have to invest through the government only. Even if the ownership of such a company is transferred to a company in India, government approval is necessary.

What is India’s message to China?

There has been tension in the relations between India and China since the conflict in the Galwan Valley in 2020. Press Note 3 was initially implemented to protect companies during the pandemic. But now it is working as an important weapon of national security. The government wants to ensure that there is no threat to national interests and security even while restoring economic relations.

India wants to explore opportunities for economic cooperation with China. It is very keen to increase investment especially in areas like electronics manufacturing. But it is also cautious about China’s geostrategic intentions. The continuation of Press Note 3 is an attempt to maintain this balance.

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