The Indian government is reviewing around 50 investment proposals involving Chinese companies under a new screening policy, reported three Reuters sources.
Under new rules announced by India in April, all investments by entities based in neighboring countries need to be approved by the Indian government, whether for new or additional funding. China is the biggest of these investors and the rules drew criticism from Chinese investors and Beijing, which called the policy discriminatory.
“Various clearances are required. We are being a bit more cautious as one would imagine,” said a senior Indian government official in New Delhi, when asked about the impact on investment applications since the border clash.
Alok Sonker, a partner at Indian law firm Krishnamurthy & Co, said at least 10 Chinese clients had sought his advice in recent weeks for investing in India, but were waiting for more clarity on the policy outlook in India. “Uncertainty in timelines for the investment approval is dissuading parties, both Indian and Chinese, from proceeding with business as usual,” Sonker said.