As a step to further enhance business relations with China, Indian government is now encouraging the Indian industries to step up discussion with Chinese investors, especially in strategic sectors like critical minerals, pharmaceuticals and electronic, sources aware of the matter told TNIE.
While China is not a major investor for India in terms of getting large foreign direct investments (FDI), India focuses on building a strategic business relationship to have better access to the technology.
“No one can wish away Chinese companies and their technology capabilities, many Indian corporates are keen to partner with them. Ministry of External Affairs (MEA) and DPIIT are getting positively inclined to these demands from the industry, and are swiftly reviewing cases in strategic sectors like electronics, critical minerals, pharmaceuticals and chemicals, electric vehicles etc,” said the source.
Sources from the industry also confirmed that the Ministry of Commerce and MEA have asked them to coordinate with the Chinese investors to deepen the ties. In the recent past, the Department for Promotion of Industry and Internal Trade (DPIIT) is actively working at a government-to-government (G2G) level to streamline and expedite visa approval processes, particularly to facilitate ease of doing business and support fast-track investment mechanisms. The government recently eased the Press Note 3 norms to allow non-controlling investments from China and speed up approvals for targeted manufacturing sectors from land-bordering countries (LBCs).
Under Press Note 3 (PN3), introduced in 2020, foreign investments involving beneficial ownership from countries sharing a land border with India, including China, required prior government approval even when such ownership was small.
While some Indian companies faced challenges in getting Chinese visa in the recent past, MEA assured that India has already taken up the issue of business visa difficulties faced by Indian companies with the Chinese government as part of efforts to work towards greater normalisation of ties between the two countries.
“The preferred approach seems to be retaining majority control with the Indian JV partner, who is also bringing capital into these projects,” said the source. The government is also considering further easing of provisions under Press Note 2 (PN2), which replaced PN3, to attract more investments from companies with less than 10% beneficial ownership by Chinese investors- with complicated paperwork to facilitate foreign investment while retaining scrutiny of Chinese-linked capital.