The Indian government, however, said that the changes in policy were brought in to curb “opportunistic takeovers/acquisitions”.
New Delhi| China on Monday said that India’s new policy for Foreign Direct Investments (FDI) violate the non-discrimination principles of WTO and are gainst the fair and free trade. China also called for “revision of discriminatory practices”.
On Saturday, the Indian government increased scrutiny of investments from companies based in neighboring countries. As per the experts, the change came to avoid Indian corporate takeover by Chinese firms during the coronavirus pandemic. The government said that the changes in policy were brought in to curb “opportunistic takeovers/acquisitions”.
The Chinese embassy in its statement said, “The additional barriers set by the Indian side for investors from specific countries violate WTO’s principle of non-discrimination, and go against the general trend of liberalization and facilitation of trade and investment. We hope India would revise relevant discriminatory practices, treat investments from different countries equally, and foster an open, fair and equitable business environment.”
According to new rules, companies based in neighboring countries of India will have to take permission from the Indian government instead of taking the automatic route.
Ministry of Commerce and Industry said in a press release, “An entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.”
Congress leader Rahul Gandhi had also suggested the central government to protect the Indian corporate from opportunistic takeovers by foreign companies. He had said, “The massive economic slowdown has weakened many Indian corporates making them attractive targets for takeovers. The Govt must not allow foreign interests to take control of any Indian corporate at this time of national crisis.”
After the government changed the policy for FDI, Rahul thanked the government for making the amends.
I thank the Govt. for taking note of my warning and amending the FDI norms to make it mandatory for Govt. approval in some specific cases. https://t.co/ztehExZXNc
— Rahul Gandhi (@RahulGandhi) April 18, 2020
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