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Investment from China: Approach of India

Investment from China Approach of India - Corpseed.jpg


International Business is need of an hour. India is being a member of the World Trade Organization and other International agencies, do support foreign Individuals or entities to make investments in India. Foreign Investment is always needed of the Country to accumulate capital for further investment, employment generation and scalability of Business and Innovation align therewith.

No country in Globe can run alone, except to have tie-ups and nationwide approval and acceptance. Across the globe various country has different speciality and character based on skillset and geographical or resource availability which in fact do generally differ from each other country, developing the need of the nation to open Business borders.

China is unavoidable irrespective of human sentiments and government agenda, it may seem they are strict but it’s not in actuality. So-called Social Media campaign to attract the human sentiments for the public at large is temporary and is not the basis of International Business. The Government is tirelessly working on improvisation of Foreign Investment in order to boost their confidence and faith in India and its growing market irrespective of Country.

The incidence of recent mishaps does raise conflict on the relation in between China and India but it’s not on the long run. It has been rightly said that a person can change friends but not neighbours, and its a matter of Nation. So Foreign Diplomacy with neighbour Countries and others do drastically differ, is globally accepted norms of Foreign Policy just because of a single scenario that neighbours can’t be changed. The matter is always seen with greater importance. The Government of India has a very basic Foreign Policy i.e. “Neighbor First”, policy statements and actions of the Government may seem different in Social Media but not on actual grounds of implementation.

The government of India acknowledge its strength and focus to develop the nation and it’s always a priority of each Government across the Globe, as like others, simple. No questions on it. And to acquire the agenda of Development, Obviously, Government need revenue from Direct and Indirect Taxes and other Fees as per stated Act, Rules and Regulations as well as International Support in terms of Foreign Loan, Grants and Investment. And as like others, Government reserves the accessibility and allow the ability to get technical support, loan, investment etc. from the country. It is also not bad at all. Every Country reserves this right, either India or China. 

The government of India has

  • Huge Demography in terms of human resources and market space
  • Make in India is an initiative to establish a manufacturing plant and set up to promote the business in India
  • Aatmanirbhar Bharat is again the flagship initiation of the Government to make the country self-reliant and independent as like other developed nations either the USA, Japan or China
  • Global Market place due to huge demography and good purchasing power capacity
  • Low resource cost either its Human Resources, Infrastructure or Compliance Cost of any business set up.
  • Tax Relief and Government Initiatives, again provide an edge in comparison to other countries to attract foreign investment.
  • Law and order of the nation is also another aspect from where political stability and ongoing Governmental support for establishing the industry is there in India

In fact, every aspect to safeguard foreign investor interest in India is set up by Government in order to develop faith and confidence in Indian Industry.

The government of India has a genuine movement of it to make the country better than earlier either through domestic industry support or foreign investment confidence and boost. The result is there.

Talking about India and China

Government has no biasedness against China Investment and their business scalability from here in India. As China's dominance in various trade products still prevails and is unavoidable. And on an obvious note, Government may seem negative about Chinese Investment but not like the way the media are showing it. Regulatory approval and license mandate by Government is an internal policy of any country and every country in the globe asks for it. And whosoever wants to extend the business across the globe. It needs to go with the required approval and licensing. These are basic requirements of any business to start in another country. Over and out, the Budget and other commercial regulation does not bother the Chinese Individual and entity to make an investment in India, run an organization, do business and repatriate their money on their country freely but on compliance of Indian Law and Regulation.

By the Government Budget, the hike in Custom Duty is seen more precisely on the products highly imported from China like mobile device manufacturers, auto components, heavy machinery, electrical compliance, telecom equipment and home appliance. But it never going to impact the China Manufacturers reason being it makes a hole on the consumer pocket and the demand of such products is not a downfall instead makes high supply.

Two-way trade between the longstanding economic and strategic rivals stood at $77.7 billion last year, according to provisional data from India’s Commerce Ministry. Although that was lower than the previous year’s $85.5 billion total, it was enough to make China the largest commercial partner displacing the US bilateral trade with which came in at $75.9 billion amid muted demand for goods in the middle of the pandemic.

China Displaces the U.S. to Regain India’s top trade partner slot in 2020

Source: India’s Ministry of Commerce

In 2020, even as relations with Beijing plunged to new lows and New Delhi took steps against Chinese-linked businesses, China reclaimed its position at the top of the list of India’s major trade partners, replacing the USA which had climbed to number 1 in 2019.

Let’s have a look at India China Trade relationship for the last 5 years

It can’t be denied that due to conflict on relations in between both countries dozens of China-linked apps were banned, a major infrastructure contract awarded to a Chinese firm was cancelled and import of certain kinds of power equipment was banned, import duty are hiked, Foreign Direct Investment Approval is Imposed and precisely Production-linked incentives schemes were announced across sectors to reduce dependence on critical goods from China, even though building self-reliance in these critical sectors likely take several years. Irrespective of public announcements and media flaunting on China from India is the baseless reason being without better planning and strategy simply another announcement of Ban and Boycott China does not help the reality except the Political Party in ruling get popular and nothing else. This is because on the ground level people doing business has no impact on it and they are doing their business. And doing business with across globe is never been offensive and nor it will be in future. Compliance is there which needs to be compliant and they are been done, procedural delay for some sense may seem at the bureaucrats level which is common in India not only for China but often to all. Therefore the first thing to ignore or avoid is Media Triumph for the ruling Government, the reason being data speaks itself more loudly and clear. So the basic requirement is to have a genuine Compliance Officer to put the everything in order as per the prevailing law of the Nation. 

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.


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Vinay Thakur is Managing Partner in Corpseed. He focused on payments, digital transformation, and financial technology for over 15 years and holds strong expertise on fintech startups, banking innovation, and investors with a keen understanding of...
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