In a strategic move, India is considering allowing foreign direct investments (FDI) from China in high-tech sectors like electric vehicles and batteries. While maintaining caution, the government is exploring ways to expedite Chinese FDI applications in areas where India lacks resources or expertise.
Under current regulations, FDI from border-sharing countries like China requires government approval on a case-to-case basis. The government is looking to leverage Chinese expertise in technologies where India has a deficit.
Despite recent tensions, the Economic Survey has advocated for increased Chinese FDI to boost local manufacturing and exports. By attracting Chinese investments, India aims to benefit from the ‘China plus one strategy’ and reduce its trade deficit.
While unresolved border disputes remain a challenge, the two countries are exploring ways to enhance economic cooperation. Opening up to Chinese FDI could strengthen India’s manufacturing sector and improve trade relations.
Published 28 July 2024, 09:19 IST