NITI Aayog Panel Recommends Easing FDI Curbs on Chinese Investments
A high-level committee chaired by NITI Aayog member Rajiv Gauba has recommended the government to roll back or significantly ease existing restrictions on foreign direct investment (FDI) from China, Business Standard reported, citing people familiar with the discussions.
The committee’s internal report, finalized in October, has proposed two primary reform pathways, as reported by Business Standard. The first key option is the withdrawal of ‘Press Note 3,’ a 2020 regulation that requires government approval for FDI from the countries sharing a land border with India, including China.
The second option emphasises a calibrated approach, allowing investments where the beneficial ownership of a Chinese entity is below the specified threshold. Consequently, this would allow a certain level of investment without requiring the meticulous government scrutiny currently in place.
The report further says that the higher Chinese investment could enhance India’s integration into global value chains and also boost its export capacity. It has advised the Department for Promotion of Industry and Internal Trade (DPIIT) to assess these available options and reach a final decision by December 31.
This potential policy move could mark a significant shift in India’s economic stance towards Chinese investments. When contacted by the publication for comment, NITI Aayog did not respond to queries regarding the committee’s recommendations.
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