Congress Denounces Modi Government's FDI Policy Shift on China

The Congress criticized the Modi government for easing foreign direct investment norms with China. Previously, Chinese investors required approval for any investment, but the new rule only demands it for shares above 10%. Congress calls this part of a 'calibrated capitulation,' amid growing trade deficits and strained relations with China.

The Congress party has issued a strong rebuke against the Modi-led government's decision to relax foreign direct investment (FDI) regulations concerning China. The new policy allows Chinese entities with up to 10% ownership in overseas firms to invest in India without prior approval, a shift from earlier norms requiring mandatory clearance for any foreign shareholding.

Jairam Ramesh, Congress general secretary, alleged this move as a 'calibrated capitulation' to China, referencing the normalization of Sino-Indian ties despite previous border tensions. He pointed to continued economic imbalances, underscored by a trade deficit reaching over USD 115 billion in 2025, as indicators of India's softened stance.

The change in the FDI policy was sanctioned during a Union Cabinet meeting headed by Prime Minister Modi. The regulation now defines 'Beneficial Ownership' under the Prevention of Money Laundering Rules, 2003, affecting investor criteria. This decision emerges amid historic declines in India's exports to China and increasing imports, widening the trade gap further.

(With inputs from agencies.)