China says India’s new FDI rules are discriminatory and violate WTO principles of free and fair trade
- China’s cumulative investment of US$8 billion in India far exceeds the total of its neighbours put together
- Beijing hopes India will revise “discriminatory practices” and treat investments from different countries equally, says Chinese embassy spokesman
India’s new rules for foreign investment violate WTO principles of non-discrimination and are against free and fair trade, a Chinese embassy spokesperson said on Monday, potentially opening a new flashpoint in their uneasy ties.
On Saturday, India stepped up scrutiny of investments from companies based in neighbouring countries, in what is widely seen as a move to stave off takeovers by Chinese firms during the coronavirus outbreak. The changes to federal rules on investment were meant to curb opportunistic takeovers and acquisitions, the government said, but it did not mention China in its new policy statement.
In a global rout triggered by the fast spreading outbreak and the imposition of domestic lockdown measures, Indian stock markets have fallen 25 per cent since February 15, wiping out tens of billions of dollars of value.
“The impact of the policy on Chinese investors is clear,” Ji Rong, a spokesman at the Chinese embassy in New Delhi, said in a statement.
As of December 2019, China’s cumulative investment in India has exceeded US$8 billion, far more than the total investments of India’s other border-sharing countries, the statement said.
The move could set back a recent attempt by Prime Minister Narendra Modi and President Xi Jinping to improve ties between the two countries, which fought a war over border issues in 1962.