No country should have any concern over India's new FDI policy: Govt sources

No country should have any concern over India's new policy for foreign direct investment from countries sharing border with it, government sources said on Thursday, in a clear message to China which called the fresh norms "discriminatory" and "barriers" for free trade. Tightening its FDI norms, India last week made prior clearance mandatory for foreign investments from countries that share land borders with India, in a move aimed at curbing "opportunistic takeovers" of Indian companies by Chinese firms following fall in their valuation due to economic downturn triggered by the coronavirus crisis.

China criticized India for the new policy, calling it discriminatory. The neighboring country even demanded review of the new policy. Government sources said there shouldn't be concern over procedural changes made in the FDI policy, asserting that it doesn't prohibit investment from any country with which India shares its border.

They said many other countries have taken similar steps to protect their economies in view of the coronavirus pandemic. Asked about questions over effectiveness of coronavirus testing kits procured from China, the sources said the Indian Council of Medical Research is looking into the issue.

On whether India was looking for an investigation into the origin of coronavirus amid allegations of China's culpability over it, a source said: "India is focusing on battling the pandemic at this point. We can always revisit this question once this pandemic is behind us." On the issue of FDI policy, the sources said India's decision is unlikely to impact trade with any of the countries with whom India shares borders. China has called the new norms violate WTO's principle of non-discrimination and are against the general trend of free trade.

The impact of the policy was clear on Chinese investors, a Chinese embassy spokesperson said earlier this week. Chinese embassy spokesperson Ji Rong said China hoped that India would revise the "relevant discriminatory practices" and treat investments from different countries equally while fostering an "open, fair and equitable" business environment The spokesperson said China's cumulative investment in India has exceeded USD 8 billion, noting it is far more than the total investments by countries sharing border with India. According to official data, around 1,000 Chinese companies are operating in India at present.