India China Face Off

Chinese companies now invest nearly half of what the invested in 3 years ago in India

Total FDI inflows from Chinese companies stood that at $350.22 million in FY 2017-18, which fell to $299 million 2018-19 and had a freefall to $163.77 million in FY 2019-20

Investment by Chinese companies into India has nearly halved in the last three years, much before India raged a trade war against China earlier this year. The total FDI inflow from Chinese companies stood at $350.22 million in FY 2017-18, which fell to $229 million in FY 2018-19 and had a freefall to $163.77 million in FY 2019-20, according to the data provided by Anurag Singh Thakur, MoS, Ministry of Finance, in a reply to a question in Lok Sabha. The outflow to China from India has also decreased in recent years, however, it caught some pace in the last few months.

The total Outflow to China was $49.2 million in 2017, which nosedived to $12.6 million in 2018, but surged to $27.6 million in 2019 and is standing at $20.63 million in 2020. In an effort to curb opportunistic takeovers or acquisitions of Indian Companies due to the ongoing coronavirus pandemic, the government had issued a guideline in April 2020 that said firms of countries sharing land borders with India can invest only under the Government route. Also, the transfer of ownership of any existing or future FDI in an entity in India in such a case now requires government approval.

Meanwhile, India’s exports to China rose 78 per cent on-year in June 2020, said a Crisil report. From a contraction of 60.2 per cent on-year in April, exports from India improved to a contraction of 10.2 per cent in July. The reason is a sharp rise in exports to economies that have been able to control the coronavirus pandemic. However, after a major face-off at the Galwan valley earlier this year, trade relations between India and China have been fragile and the mounting uncertainties have raised tensions for firms, which have businesses across both countries. Many trade associations of India have announced to boycott Chinese products this festive season.

Over 1,600 Indian cos, received $1bn FDI from china during April 2016 to march 2020

The data was provided by written reply to the Raj shabha on Tuesday to a question on whether it is a fact that large scale investment had been made by the Chinese agencies in Indian companies, specially the starts-up.

More than 1,600 Indian companies have received foreign direct investments worth USD 1 billion from China during the April 2016 to March 2020 period, according to government data.

The data was provided in a written reply to the Rajya Sabha on Tuesday to a question on whether it is a fact that large scale investments have been made by Chinese agencies in Indian companies, specially the start-ups.

Over 1,600 companies received USD 1,020.25 million (USD 1.02 billion) Foreign Direct Investment (FDI) equity inflows from China for the April 2016 to March 2020 period, as per the data.

These companies were in 46 sectors. Out of them, the automobile industry, printing of books (including litho printing industry), electronics, services and electrical equipment received more than USD 100 million FDI each from China during the said period.

The automobile industry received the maximum FDI from China at USD 172 million. The services sector attracted such funds worth USD 139.65 million, the data showed.

In the written reply, Minister of State for Corporate Affairs Anurag Singh Thakur said the corporate affairs ministry does not maintain information regarding the investment made by Chinese agencies.

He said the Ministry of Commerce & Industry has informed that FDI Data Cell compiles and maintains the data of FDI reported through equity inflow in the country.

The relevant data for the April 2016 to March 2020 period was provided along with the written reply.

Indian and Chinese troops are engaged in a standoff along the Line of Actual Control (LAC) in eastern Ladakh.