80 Chinese cos currently active in India, equity investment negligible

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SME Times News Bureau | 09 Feb, 2021
As the Indian government pushes the 'Aatmanirbhar Bharat' vision, official data show that about 80 Chinese companies established in India are 'active' currently.

Union Finance Minister said on Tuesday that a total of 92 Chinese companies had established their place of business in India with approval from the Reserve Bank of India under the Foreign Exchange Management Act, 1999 (FEMA). Out of these, 80 companies are having their status as 'active' as on date.

On the investment by Chinese investors in Indian companies, Sitharaman cited data from the the Reserve Bank of India and said that 2,474 such investments were reported in Form FC-GPR (to be filed within 30 days from the date of allotment of equity instruments to residents outside India) and 138 number of such investments were reported in Form FC-TRS, another mode of transfer of share.

"There are 92 Chinese companies which have established their place(s) of business in India after taking due approval from the RBI/authorised dealer bank as per the provisions of the Foreign Exchange Management Act, 1999. Out of these, 80 companies are having their status as 'active' as on date," Sitharaman said in a written reply to the Rajya Sabha.

Noting that the government has not come up with any advisory for Indian companies to resist Chinese investments, the minister said that the Department for Promotion of Industry and Internal Trade (DPIIT) had amended the FDI policy by prescribing that an entity of a country, which shares land borders with India and where the beneficiary owner of investment in India is situated, or is a citizen of such country, can invest only under the government route.

The RBI has issued an amended notification vide the Foreign Exchange Management (non-debt instruments) Amendment Rules, 2020 prescribing that FDI investment from China has been brought under the government approval route, she added.

India's staunch position in terms of investments coming in from China and high imports from the country came post the hightened border tussle last year.