China-India FDI Policy Unchanged Amid Trade Tensions, Confirms DPIIT Official

A top government official has confirmed that the Foreign Direct Investment (FDI) policy regarding Chinese investments in India remains unchanged. The mandatory government approval policy, instituted in April 2020, remains in effect. Despite minimal FDI from China, bilateral trade has grown significantly, with China being India's largest trading partner.

A high-ranking government official has confirmed that India's Foreign Direct Investment (FDI) policy concerning Chinese investments remains unaltered. The secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), Amardeep Singh Bhatia, stated that the mandatory government approval for FDI from nations bordering India, including China, is still in place as per the 2020 policy.

Despite strained relations following the 2020 Galwan Valley clash and the subsequent ban on over 200 Chinese mobile apps, bilateral trade between India and China has soared. In the fiscal year 2023-24, China emerged as India's largest trading partner with two-way commerce reaching USD 118.4 billion. However, the trade deficit has also widened.

Commerce and Industry Minister Piyush Goyal recently indicated no changes supporting FDI from China. Even though China only represents a small fraction of total FDI equity in India, major incentives under the production-linked incentive (PLI) schemes have significantly boosted local manufacturing.