Centre Clears China's FDI Plans After 9-Months Freeze

  • Clearance of Foreign Direct Investment (FDI) proposals from china on a “case-by-case” basis has begun by the government, ending the freeze on such clearances that lasted around nine months.

  • Government sources informed that approvals have started, over the last few weeks, although it is so far limited to “smaller cases”.

  • It was made clear by the sources that the large proposals would be taken up later after a careful analysis of the situation.

  • The government has set up a coordination committee comprising officers from the ministries of home, external affairs, commerce and industry and Niti Aayog to help smoothen the process.

  • FDI proposals from neighboring countries are to be decided on by the ministry concerned.

  • The government had changed the rules to allow FDI from neighbouring countries in April. This move had hit the Chinese investors hard since they had emerged the major source of flows in recent years, especially in the technology and digital space.

  • The rule was changed after the COVID-19 outbreak however no consent was given as tension mounted at the Ladakh border, resulting in a pile up of investments totaling over Rs 12,000 crore.

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