NEW DELHI: India will maintain investment restrictions on neighbouring countries despite a recent agreement with China regarding patrolling along the disputed Himalayan border, Finance Minister Nirmala Sitharaman said on Wednesday.
The pact aims to resolve a prolonged military standoff and enhance diplomatic and economic relations between the two countries. The leaders of India and China are set to meet on Wednesday to discuss this development. The border clashes in 2020 strained relations between the two countries, leading to a slowdown in the exchange of investments, technology, and skilled personnel.
“I can’t blindly receive foreign direct investment (FDI) because I want money for investment, forgetful or unmindful of where it is coming from,” She said during a gathering at the Wharton Business School in the US on Tuesday.
“We want business, we want investment, but we need some safeguards because India is located in a neighbourhood which is very, very sensitive,” she stated ahead of the bilateral meeting between Prime Minister Narendra Modi and Chinese Premiere Xi Jinping in Russia on the sidelines of BRICS summit.
The FM highlighted the importance of disclosure norms established by the market regulator Securities and Exchange Board of India (Sebi) that reveal the ultimate beneficiary of investments. “Sometimes the ultimate beneficiary is a concern, not because of who it is, but where it is from.” She emphasised that various countries have implemented regulations to address such concerns.
“FDI, otherwise, is welcome, and we have opened it up. Sebi has been forward-looking in reducing regulations,” the finance minister added. The FM pointed towards India’s increased scrutiny of investments originating from neighbouring countries, a step taken in 2020 to bolster security clearances.