Balancing Act: India's Stance on Chinese Investments

India should stay open to Chinese investments, similar to the US and Germany, while being cautious of potential threats from unfriendly nations, according to Arvind Panagariya, Chairman of the 16th Finance Commission. He advocates for Free Trade Agreements to reduce tariffs and boost global supply chain participation.

Arvind Panagariya, Chairman of the 16th Finance Commission, emphasized that India should remain open to Chinese investments, mirroring approaches taken by the US and Germany. However, he urged caution regarding investments originating from politically unfriendly countries to safeguard national interests.

Panagariya highlighted that developed nations are selectively open to Chinese investments, implying India could adopt a similar stance across a limited number of sectors. The Economic Survey 2023-24 also supports attracting Chinese FDI to enhance local manufacturing and export capabilities.

He further advocated for India pursuing Free Trade Agreements (FTAs) with more countries. Using the iPhone as an example, Panagariya explained that cross-border component trade increases costs due to tariffs, which FTAs could mitigate. India is currently in negotiations with multiple nations, including the EU and the UK.

(With inputs from agencies.)