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India's new FDI rules violate WTO trade principles: PRC

Apr '20
Pic: Shutterstock
Pic: Shutterstock
India’s new rules for foreign investment, introducing ‘additional barriers’, violate World Trade Organisation (WTO) principles of non-discrimination and are against free and fair trade, a Chinese embassy spokesperson in New Delhi said yesterday. India's action is also against the consensus arrived at the G20 to realise a free, fair and non-discriminatory environment for investment, he said.

The impact of the policy on Chinese investors is clear, said counsellor Ji Rong.

India last week stepped up scrutiny of investments from companies based in neighbouring countries, in what is widely perceived as a move to prevent takeovers by Chinese firms during the COVID-19 outbreak.

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.

India’s trade ministry said in a notification dated April 17 that the changes to rules on investment were meant to curb ‘opportunistic takeovers/acquisitions’. It did not mention China.

The spokesperson said China's cumulative investment in India has exceeded $8 billion, noting it is far more than the total investments by countries sharing border with India.

She said India's new policy will make it difficult for companies from countries sharing land border with India, including China, to invest in India, adding decisions by companies to invest depends on a country's economic fundamentals.

"Facing the economic downturn caused by COVID-19, countries should work together to create a favourable investment environment to speed up the resumption of companies' production and operation," she added.

Fibre2Fashion News Desk (DS)

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