India will offer faster approvals for investments involving minority Chinese stakes across a wider range of sectors, a Reuters report said, quoting Industry Secretary Amardeep Singh Bhatia
The report stated that India has eased investment rules to support domestic manufacturing and attract foreign capital, particularly for proposals involving small Chinese shareholdings.
Under the new framework, India has scrapped the blanket government approval requirement for firms with up to 10 per cent Chinese ownership. Under the new framework, the investments in sectors such as electronics, batteries, rare-earth magnets, and processing will be cleared within 60 days, provided Indian residents retain majority control.
Forming inter-ministerial panel
Industry Secretary Amardeep Singh Bhatia said that an inter-ministerial panel headed by the cabinet secretary will scrutinise Chinese investment proposals and may revise the list of sectors eligible for faster clearance.
The Indian government had tightened investment rules to reduce India’s dependence on China following the deadly border clash in 2020. However, the curbs resulted in a reduction in capital and technology transfer for Indian manufacturers and forced the shelving of a 2023 plan by China’s BYD to invest $1 billion in an electric car joint venture.
“We hope this will help set up more manufacturing facilities in India,” Bhatia said, adding that the rules have been eased after consultation with investors such as BlackRock and several domestic manufacturers.
Security scrutiny
Industry experts say the move could revive delayed funding rounds, joint ventures, and investment proposals that have been stuck under the stricter regime.
A clearer and time-bound approval process could significantly accelerate project implementation, analysts said. Failure of the production-linked incentive schemes to backfill critical technologies and components at scale in key sectors prompted the industry to demand relief.
Bhatia said that while investment rules are being eased, security concerns related to Chinese investments remain, and proposals will continue to undergo scrutiny.
“There will be an expedited process and some steps are being done away with. But broadly as far as the security clearances are required, that process will remain,” Bhatia added.