DPIIT relooks at FDI from China: Govt sources

NEW DELHI: The Department for Promotion of Industry and Internal Trade (DPIIT) is considering revisiting the restrictions placed on foreign direct investment (FDI) from China as part of a broader evaluation of the country’s foreign investment policies, as per the government sources.

Consultations with stakeholders are underway, and a decision has not yet been reached, sources said. “DPIIT is looking into what should be the revised FDI policy, and it is working in that direction. They are doing stakeholder consultations,” a top official said.

The Economic Survey for 2023-24, released in July, emphasised the potential benefits of increasing FDI from China to enhance India’s exports. It argued that utilising FDI as part of ‘China-Plus One’ strategy’ is more beneficial than solely relying on trade.

This is relevant as China is India’s largest import partner, and the trade deficit with it has been on the rise. The survey highlighted the experiences of countries like Vietnam, Mexico, Taiwan, and South Korea, which have benefitted from increased Chinese FDI as the US shifted its trade focus away from China.