- India has set up a screening panel to vet all Chinese foreign investment proposals and those considered “non-controversial” could be approved.
- More than 100 proposals involving foreign direct investment (FDI) from China are pending.
- Prior government clearance was made mandatory for FDI from countries sharing a land border in April.
- This was widely seen to be directed at curbing Chinese takeovers of companies amid stock market volatility in the wake of the Covid-19 pandemic.
- This scrutiny intensified following tension on the border.
- The screening panel is headed by the home secretary and has the Department for Promotion of Industry and Internal Trade (DPIIT) secretary as a member.
- An inter-ministerial committee has been set up to look at the proposals that various ministries had received that were forwarded to the home ministry for security clearance.
- FDI from China was $2.4 billion or 0.51% of the total between April 2000 and June 2020.
- Prior government approval or clearance by the ministry of home affairs is required for investments in critical sectors including defence, satellites, mining, civil aviation, media, private security agencies and telecommunication.
SRC: ET