China has protested against the revised foreign investment policy announced by India that seeks to block companies from neighboring nations from planning takeovers, saying that the new FDI regime is against the spirit of free trade and would negatively impact the growing investments from China.
The revision announced on April 18 makes it “much difficult” for companies from neighbouring countries, including China, to invest in India, Ji Rong, Counselor and spokesperson of the Chinese Embassy in New Delhi, said on April 20;
With Chinese investments reaching $8 billion in 2019, the new policy will hamper the operations of the companies from China, said the Chinese diplomat.
Mrs Ji Rong urged India to review the decision to “foster an open, fair, and equitable business environment”. “We hope India would revise relevant discriminatory practices, treat investments from different countries equally, and foster an open, fair and equitable business environment,” she added.
“As of December 2019, China’s cumulative investment in India has exceeded $8 billion, far more than the total investments of India’s other border-sharing countries. The impact of the policy on Chinese investors is clear,” Mrs Ji said.
“Chinese investment has driven the development of India’s industries, such as mobile phone, household electrical appliances, infrastructure and automobile, creating a large number of jobs in India, and promoting mutual beneficial and win-win cooperation. Chinese enterprises actively made donations to help India fight COVID-19 epidemic,” she said.
The Chinese diplomat also reminded India of the economic downturn triggered by COVID-19 which necessitates enhanced cooperation between all countries. “Where companies choose to invest and operate depends on the country’s economic fundamentals and business environment. Facing the economic downturn caused by COVID-19, countries should work together to create a favorable investment environment to speed up the resumption of companies’ production and operation,” she 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, the diplomat said.
“More importantly, they do not conform to the consensus of G20 leaders and trade ministers to realize a free, fair, non-discriminatory, transparent, predictable, and stable trade and investment environment, and to keep our markets open. Companies make choices based on market principles,” the spokesperson said.
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