NEW DELHI: After imposing restrictions on foreign companies from participating in government projects and procurements, the Centre has stepped up scrutiny of Chinese investments in NGOs and start-ups. That apart, the government also plans to tighten norms for investment directed via Singapore and Hong Kong.
“There are reports of direct and indirect Chinese fundings to some NGOs, self-help groups and even think tanks. In the coming few days, we will be closely scanning the latest funding, especially in the last 12-14 months,” a senior Finance ministry official told TNIE. On Friday evening, after a series of meetings between officials from the Finance Ministry, Commerce Ministry and Prime Minister’s Office, the government has changed rules to enable curbs on bidders from countries that share a land border with India “on the grounds of defence and national security”.
Officials added the government is also planning to tighten norms and closely scan investments from Chinese firms which are coming via Singapore and Hong Kong.“We are keeping a track on FDIs coming from China to prevent their takeover of Indian companies. However, in last 2-3 years many investment have come via their Singapore and Hong Kong subsidiary, which are investing in start-ups and smaller firms. Also, sometimes they are funding companies based in Singapore, which in turn invest in Indian tech companies” the official noted.
A large number of Chinese investors, such as electronics goods maker Xiaomi, have entered India via Singapore and other countries, which do not reflect in the official numbers, a point which was highlighted by many since the political tension built up between the two countries.
Elaborating further, the official said that the government has learnt that many blockchain companies are funded by Chinese firms via cryptocurrencies and other virtual currency mode making it very difficult to track, which was already flagged by investigative agencies. Recently, the government tightened its policy on foreign direct investment to require investment from any country that shares a land border with India to go through a government approval process.