Davos, 18 January 2024 (TDI): If the India-China border remains peaceful, India may ease its heightened scrutiny of Chinese investment. A senior Indian official hinted at the possibility, marking the first signal in four years that the authorities could lift the curbs.
At Davos, Rajesh Kumar Singh, a top industrial policy bureaucrat, revealed on Wednesday that the longstanding border tensions, the primary irritant between nuclear-armed Asian giants, have eased. This positive development may pave the way for enhanced investment ties. Singh shared this insight during the annual World Economic Forum meeting in Davos, Switzerland.
In 2020, India enhanced scrutiny of investments from neighboring countries. The process now includes thorough vetting and security clearances, reinforcing national security measures.
Clash between Chinese-Indian troops
A clash erupted between Chinese and Indian troops on their disputed 3,800-km (2,400-mile) Himalayan frontier. The confrontation resulted in the loss of at least 20 Indian and four Chinese soldiers, marking their most severe military conflict in decades. In response, this move is widely perceived as a form of retaliation.
The imposed restrictions have disrupted billions in investments between the world’s two most populous nations, halting planned projects. This includes ventures by Chinese automakers such as BYD (002594.SZ) and Great Wall Motor (601633.SS). The impact extends across various sectors, impacting the flow of funds and stalling crucial initiatives.
The investment rules “could change once our relationship there stabilises because I think the border issues that we’ve had – the border has stabilised”, Singh, secretary at the Department for Promotion of Industry and Internal Trade, said in an interview.
){kind=link}