India Unlikely to Lift Ban on Chinese Investments in the Near Future

India Unlikely to Lift Ban on Chinese Investments in the Near Future

No Immediate Policy Change Expected

India unlikely to lift Ban on Chinese Investments in the near future, according to Chief Economic Adviser V. Anantha Nageswaran. Speaking at an event in Mumbai, he emphasized that changes in investment policy require mutual understanding and careful consideration.

Gradual Approach to Policy Adjustments

Nageswaran used the metaphor of “crossing the river by feeling the stones” to indicate a cautious approach. He stated that immediate results should not be expected, as both nations need to navigate economic dependencies carefully.

Background of Investment Restrictions

Since 2020, India has tightened its scrutiny of Chinese investments following border clashes in the Himalayan region that resulted in casualties on both sides. These tensions have influenced economic policies, leading to stricter regulations on Chinese companies investing in India.

India’s Growing Trade Deficit with China

India has initiated discussions with China to address its growing trade imbalance. Nageswaran noted that India is among the top three countries with the largest trade deficits with China, estimated between $93 billion and $95 billion.

Future Outlook

While discussions are ongoing, India’s policy on Chinese investments is unlikely to change in the short term. The government remains focused on evaluating the broader economic and geopolitical implications before making any adjustments.