The Government of India is likely to approve huge Chinese investments in sectors where local companies do not have adequate capacity. Though the country is not planning an open-door policy, the officials consider this as a part of a three-pronged standard operating guideline.
The government is also likely to approve two other types of investment proposals. The first is the investment companies or investors who have headquarters outside China but the fund comes in the way of China. The second proposal allows Chinese investors to make small investments. However, security clearance will be required in all the three cases.
Who are the Chinese Investors?
In response to the alleged Chinese troop incursions in the western Himalayan region, India restricted Chinese investment in the country. This led to piling of 150 investment proposals from China worth more than $2 billion. Now, the Indian Government is planning to approve around 45 investment proposals from China, including those Great Wall Motor and SAIC Motor Corp.
As per the government and industry sources, the 45 investment proposals are from the manufacturing sector, considered non-sensitive in national security. Proposals from Great Wall and SAIC are secretively to be on the list, as per industry sources.
Great Wall and General Motors (GM) made a joint proposal last year seeking consent for the Chinese automaker to purchase the U.S. company’s car plant in India for a deal of around $250-$300 million.
The Great Wall’s global strategy plan includes investing $1 billion in India over the next few years, placing its feet in electric vehicles.
(It is important to note the recent encouragement(pressure) to use electric vehicles the government.)
Why has the Indian Government changed its stance?
Experts view the change in Indian Government’s stance as a result of the improvement in border situation. The two countries announced on Sunday that the troops from both sides have withdrawn.