India has to change its policy if it wants to attract more Chinese investment: China Daily editorial
There have been positive signs of improving China-India economic relations recently, as evidenced by Indian officials talking about easing restrictions on Chinese investment, and New Delhi making moves to expedite visa approvals for Chinese technicians.
Rajeev Chandrasekhar, India's minister of state for electronics and information technology, said recently that his country is "open" to investments from China, while Indian Foreign Minister Subrahmanyam Jaishankar said "we are not closed to business from China".
New Delhi has also launched a new portal to streamline the issuing of business visas for Chinese technicians whose expertise is key to India's manufacturing facilities that use Chinese machinery.
These developments are encouraging considering how trade and investment between the two giant neighbors have been disrupted due to the restrictive measures New Delhi adopted after a deadly clash between the two countries' border troops in June 2020.
Since then, India has banned hundreds of Chinese apps including TikTok on the grounds of addressing national security concerns, and launched so-called regulatory investigations against major Chinese high-tech companies such as Xiaomi and Oppo.
The crackdown has disrupted the previously good economic relations India had with China.
The seeming softening of attitude by New Delhi toward Chinese investment may have been made out of expediency, as declining foreign investment is likely to pose a challenge to India's economic ambition to become a developed country by the middle of this century.
Foreign direct investment in India plummeted by more than 40 percent to $28 billion last year, according to a report by the United Nations Conference on Trade and Development, compared with an annual average of around $40 billion in recent years. Analysts attributed the decline in FDI inflows to red tape and India's discriminatory economic policies.
Yet a recent survey by India's chief economic adviser suggested that boosting FDI inflows from China in nonsensitive sectors such as solar panels and battery manufacturing, where India lacks expertise, "appears more advantageous than relying on trade" for its economy to achieve sustained growth.
India's exports to China, its largest trading partner, stood at $16.65 billion last year, while imports from the country reached $101.75 billion, leaving a trade deficit of more than $85 billion.
Despite the tensions in bilateral relations and India's curbs on Chinese investment, China continues to play an irreplaceable role in India's economic development. For example, China has remained the biggest supplier of components and parts for the development of India's booming electronic and automobile industries, hallmarks of India's economic success. All this attests to the resilience and potential of economic and trade cooperation between the two countries.
China views India as an important investment destination and has expressed interest in expanding its investment footprint in various sectors in India, and it continues to promote and encourage bilateral investment cooperation between the two countries.
Increased trade and investment from China can help boost India's economy. However, despite the increasing calls to attract more investment from China, India's Commerce and Industry Minister Piyush Goyal insisted there is no "rethinking" to support Chinese investments in the country.
Since the two countries are not rivals or threats to each other but partners in cooperation and development, creating opportunities for each other benefits both sides.
New Delhi should work to strengthen its economic partnership with China, and provide a fair, just, transparent and nondiscriminatory business environment for Chinese investment.
