Niti for easing curbs on China investments

Niti Aayog has proposed allowing Chinese entities to buy up to 24% stake in Indian companies without additional checks, easing a rule that delays investments from the neighbour.

At present, any investment by Chinese entities in Indian companies needs security clearance from the Indian government. In July 2020, the government restricted bidders from countries which share a land border with India from bidding in any government procurement contracts on grounds of national security and avoid takeovers. Such bidders have to register with a Registration Committee constituted by the Department for Promotion of Industry and Internal Trade and require political and security clearance from the ministries of external and home affairs, respectively.

“The report has gone. We need to see what happens,” said an official.

The report is being examined by various ministries including finance, commerce and industry, and external affairs.

Following EAM’s Trip to China

The report comes amid external affairs minister S Jaishankar’s first trip to China after five years. He met his Chinese counterpart Wang Yi in Beijing and raised restrictive trade measures and roadblocks to economic cooperation in the backdrop of restrictions on rare earth magnet supplies to India. He also brought up the issue of faster de-escalation along LAC in eastern Ladakh and the two sides agreed to take additional practical steps.

The Economic Survey in 2024 had made a case for allowing foreign direct investment from China, saying that this can help increase India’s global supply chain participation and push exports.