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Why in news?

The Centre plans to fast track the review of some investment proposals from neigbouring countries such as China following concerns new screening rules could hit plans of companies and investors.


To avoid opportunistic takeovers during the coronavirus (COVID-19) outbreak, India said this past week that all foreign direct investment from countries sharing a land border would require prior government clearance, meaning they can’t go through a so-called automatic route.

Read More about the Centre’s move regaring Control of Foreign Investments here:

(First Article in 19th April Current Affairs)

Why would they fast track reviews?

  • Advisers to Chinese firms have said they are concerned the process could take several weeks and hit deals and investment timelines.
  • Auto firms such as SAIC’s MG Motor and Great Wall, and investors Alibaba and Tencent have placed major bets on India.
  • The Chinese Embassy in New Delhi has called the new screening policy discriminatory.
  • The new screening rules are designed to prevent fire sales of corporate assets during the COVID-19 outbreak but government sources have said they will also apply to greenfield investments, as well as investments from Hong Kong.
  • While the fast track mechanism would be open to all India’s neighbours with a land border, China would be the main beneficiary.
  • It has major existing and planned investments in India, which the Brookings research group estimated at $26 billion.

Read More about China’s Response to the move here:

(Fourth Article in 21st April Current Affairs)

February 2024