Latest news with #Chinese companies
Yahoo
5 days ago
- Business
- Yahoo
Exclusive-India's top think tank recommends easing investment rules for Chinese firms, sources say
By Sarita Chaganti Singh and Nikunj Ohri NEW DELHI (Reuters) -The Indian government's top think tank has proposed easing rules that de facto require extra scrutiny for investments by Chinese companies, arguing that the rules have meant delays for some sizeable deals, three government sources said. Currently, all investment by Chinese entities in Indian companies need to gain a security clearance from both India's home and foreign ministries. The think tank, NITI Aayog, has proposed that Chinese companies can take a stake of up to 24% in an Indian company without any approval being required, said the sources who were not authorised to speak to media and declined to be identified. The proposal, reported for the first time by Reuters, is part of a plan to boost foreign direct investment in India and is being studied by the trade ministry's industries department, the finance and foreign ministries, as well as Prime Minister Narendra Modi's office, the sources said. And while not all of NITI Aayog's ideas are necessarily taken up by the government, the proposal comes at a time when India and China are seeking to mend ties that have been particularly strained since border clashes in 2020. Any decision to ease might be months away and will be taken by political leaders, two of the sources said. They added that the industries department is in favour of easing, but the other government bodies are yet to give their final view. NITI Aayog, the ministries, the industries department and the prime minister's office did not reply to Reuters requests for comment. DEALS SHELVED The rules were put in place in 2020 after border clashes, including hand-to-hand fighting between the two neighbours. They only apply to land bordering nations, which affects Chinese companies the most. By contrast, companies from other countries can freely invest in many sectors such as manufacturing and pharmaceuticals, while some sensitive sectors such as defence, banking and media have restrictions. Deals such as a 2023 plan by China's BYD to invest $1 billion in an electric car joint venture have been shelved due to the rules, sources have said. While foreign investment has slowed globally since Russia's invasion of Ukraine, the rules hampering Chinese investment in India have been seen as a significant factor behind a large drop in the South Asian country's FDI. Net foreign direct investment in India tumbled to a record low of just $353 million in the past financial year, a fraction of the $43.9 billion logged in the year ended March 2021. An easing in military tensions since October has led to more efforts by both countries to mend ties, with plans for the resumption of direct flights and India seeking a "permanent solution" to their decades-old border dispute. Indian Foreign Minister Subrahmanyam Jaishankar's made his first trip to China in five years this week, telling his counterpart that the two nations must settle tensions along their border and avoid restrictive trade measures such as China's curbs on the supply of rare earth magnets. The think tank has also recommended revamping the board that decides on foreign direct investment proposals, the sources said.
Free Malaysia Today
5 days ago
- Business
- Free Malaysia Today
India's top think tank recommends easing investment rules for Chinese firms
India and China are seeking to mend ties that have been particularly strained since border clashes in 2020. (Envato Elements pic) NEW DELHI : The Indian government's top think tank has proposed easing rules that de facto require extra scrutiny for investments by Chinese companies, arguing that the rules have meant delays for some sizeable deals, three government sources said. Currently, all investments by Chinese entities in Indian companies need to gain a security clearance from both India's home and foreign ministries. 'The think tank, NITI Aayog, has proposed that Chinese companies can take a stake of up to 24% in an Indian company without any approval being required,' said the sources who were not authorised to speak to media and declined to be identified. 'The proposal, reported for the first time by Reuters, is part of a plan to boost foreign direct investment (FDI) in India and is being studied by the trade ministry's industries department, the finance and foreign ministries, as well as Prime Minister Narendra Modi's office,' the sources said. While not all of NITI Aayog's ideas are necessarily taken up by the government, the proposal comes at a time when India and China are seeking to mend ties that have been particularly strained since border clashes in 2020. 'Any decision to ease might be months away and will be taken by political leaders,' two of the sources said. They added that the industries department is in favour of easing, but the other government bodies are yet to give their final view. NITI Aayog, the ministries, the industries department and the prime minister's office did not reply to Reuters requests for comment. Deals shelved The rules were put in place in 2020 after border clashes, including hand-to-hand fighting between the two neighbours. They only apply to land bordering nations, which affects Chinese companies the most. By contrast, companies from other countries can freely invest in many sectors such as manufacturing and pharmaceuticals, while some sensitive sectors such as defence, banking and media have restrictions. 'Deals such as a 2023 plan by China's BYD to invest US$1 billion in an electric car joint venture have been shelved due to the rules,' sources have said. While foreign investment has slowed globally since Russia's invasion of Ukraine, the rules hampering Chinese investment in India have been seen as a significant factor behind a large drop in the South Asian country's FDI. Net FDI in India tumbled to a record low of just US$353 million in the past financial year, a fraction of the US$43.9 billion logged in the year ended March 2021. An easing in military tensions since October has led to more efforts by both countries to mend ties, with plans for the resumption of direct flights and India seeking a 'permanent solution' to their decades-old border dispute. Indian foreign minister Subrahmanyam Jaishankar's made his first trip to China in five years this week, telling his counterpart that the two nations must settle tensions along their border and avoid restrictive trade measures such as China's curbs on the supply of rare earth magnets. 'The think tank has also recommended revamping the board that decides on FDI proposals,' the sources said.
Zawya
5 days ago
- Business
- Zawya
India's top think tank recommends easing investment rules for Chinese firms, sources say
NEW DELHI - The Indian government's top think tank has proposed easing rules that de facto require extra scrutiny for investments by Chinese companies, arguing that the rules have meant delays for some sizeable deals, three government sources said. Currently, all investment by Chinese entities in Indian companies need to gain a security clearance from both India's home and foreign ministries. The think tank, NITI Aayog, has proposed that Chinese companies can take a stake of up to 24% in an Indian company without any approval being required, said the sources who were not authorised to speak to media and declined to be identified. The proposal, reported for the first time by Reuters, is part of a plan to boost foreign direct investment in India and is being studied by the trade ministry's industries department, the finance and foreign ministries, as well as Prime Minister Narendra Modi's office, the sources said. And while not all of NITI Aayog's ideas are necessarily taken up by the government, the proposal comes at a time when India and China are seeking to mend ties that have been particularly strained since border clashes in 2020. Any decision to ease might be months away and will be taken by political leaders, two of the sources said. They added that the industries department is in favour of easing, but the other government bodies are yet to give their final view. NITI Aayog, the ministries, the industries department and the prime minister's office did not reply to Reuters requests for comment. DEALS SHELVED The rules were put in place in 2020 after border clashes, including hand-to-hand fighting between the two neighbours. They only apply to land bordering nations, which affects Chinese companies the most. By contrast, companies from other countries can freely invest in many sectors such as manufacturing and pharmaceuticals, while some sensitive sectors such as defence, banking and media have restrictions. Deals such as a 2023 plan by China's BYD to invest $1 billion in an electric car joint venture have been shelved due to the rules, sources have said. While foreign investment has slowed globally since Russia's invasion of Ukraine, the rules hampering Chinese investment in India have been seen as a significant factor behind a large drop in the South Asian country's FDI. Net foreign direct investment in India tumbled to a record low of just $353 million in the past financial year, a fraction of the $43.9 billion logged in the year ended March 2021. An easing in military tensions since October has led to more efforts by both countries to mend ties, with plans for the resumption of direct flights and India seeking a "permanent solution" to their decades-old border dispute. Indian Foreign Minister Subrahmanyam Jaishankar's made his first trip to China in five years this week, telling his counterpart that the two nations must settle tensions along their border and avoid restrictive trade measures such as China's curbs on the supply of rare earth magnets. The think tank has also recommended revamping the board that decides on foreign direct investment proposals, the sources said.
Reuters
5 days ago
- Business
- Reuters
Exclusive: India's top think tank recommends easing investment rules for Chinese firms, sources say
NEW DELHI, July 18 (Reuters) - The Indian government's top think tank has proposed easing rules that de facto require extra scrutiny for investments by Chinese companies, arguing that the rules have meant delays for some sizeable deals, three government sources said. Currently, all investment by Chinese entities in Indian companies need to gain a security clearance from both India's home and foreign ministries. The think tank, NITI Aayog, has proposed that Chinese companies can take a stake of up to 24% in an Indian company without any approval being required, said the sources who were not authorised to speak to media and declined to be identified. The proposal, reported for the first time by Reuters, is part of a plan to boost foreign direct investment in India and is being studied by the trade ministry's industries department, the finance and foreign ministries, as well as Prime Minister Narendra Modi's office, the sources said. And while not all of NITI Aayog's ideas are necessarily taken up by the government, the proposal comes at a time when India and China are seeking to mend ties that have been particularly strained since border clashes in 2020. Any decision to ease might be months away and will be taken by political leaders, two of the sources said. They added that the industries department is in favour of easing, but the other government bodies are yet to give their final view. NITI Aayog, the ministries, the industries department and the prime minister's office did not reply to Reuters requests for comment. The rules were put in place in 2020 after border clashes, including hand-to-hand fighting between the two neighbours. They only apply to land bordering nations, which affects Chinese companies the most. By contrast, companies from other countries can freely invest in many sectors such as manufacturing and pharmaceuticals, while some sensitive sectors such as defence, banking and media have restrictions. Deals such as a 2023 plan by China's BYD ( opens new tab to invest $1 billion in an electric car joint venture have been shelved, opens new tab due to the rules, sources have said. While foreign investment has slowed globally since Russia's invasion of Ukraine, the rules hampering Chinese investment in India have been seen as a significant factor behind a large drop in the South Asian country's FDI. Net foreign direct investment in India tumbled to a record low of just $353 million in the past financial year, a fraction of the $43.9 billion logged in the year ended March 2021. An easing in military tensions since October has led to more efforts by both countries to mend ties, with plans for the resumption of direct flights and India seeking a "permanent solution" to their decades-old border dispute. Indian Foreign Minister Subrahmanyam Jaishankar's made his first trip to China in five years this week, telling his counterpart that the two nations must settle tensions along their border and avoid restrictive trade measures such as China's curbs on the supply of rare earth magnets. The think tank has also recommended revamping the board that decides on foreign direct investment proposals, the sources said.
South China Morning Post
13-07-2025
- Business
- South China Morning Post
For Chinese firms going out, global success requires truly ‘going in'
Chinese companies are accelerating their global expansion, driven primarily by two forces. The first is technology. Amid tightening restrictions in the West, especially the United States, many Chinese firms struggle to access critical technologies, equipment, industrial software and even raw components. Without breakthroughs, China's manufacturing risks a long-term decline. A growing number of scientists, engineers and executives have taken the leap into entrepreneurship, often developing 'me too' or 'me better' products as import substitutes . Faced with the limits of domestic demand, however, companies are being pushed overseas for scale and survival. In theory, they should feel welcome abroad due to their cost-effective solutions. But their motives are often met with suspicion amid geopolitical tensions. The European Union, for instance, has tightened its screening of foreign investment , a move seen as targeting Chinese companies in sensitive sectors such as artificial intelligence and semiconductors The second driver behind Chinese firms going global is their repositioning in supply chains. Many small and medium-sized companies act as suppliers to multinationals. As these supply chains shift and restructure, those who fail to keep up risk being left behind. In a sense, Chinese companies are being pushed overseas by dual challenges: razor-thin margins from cutthroat domestic competition and an over-reliance on foreign orders. For many, overseas expansion is the only viable path. This supply chain-driven globalisation faces growing scrutiny. Western nations, led by the US, are not only tracing the origins of imports but also tracking investment sources. For Chinese companies, the key challenge lies in how to climb higher in the value chain.
