In fears of encountering "opportunistic" takeover investments by its neighboring South Asian members, The government of India yesterday proceeded to place a ban on foreign investments made via the automatic route. This move particularly highlights New Delhi's tension of an imminent threat of a takeover of the Indian commercial market by China.

With the Chinese manufacturing sector already back on its toes, many countries across the globe allege this pandemic a well-orchestrated attack. But these allegations remain contested in forms of law-suits and offical letters dispatched via Government to Government routes.

India tweaked the FDI policy to ward off any possible opportunistic take over attempts of it's shut-down or dead revenue-generating companies, whose values dropped due to the COVID-19 lockdown. Such measures were already in force to prevent investments from India's neighboring countries Pakistan and Bangladesh.

How the FDI system worked before?

Foreign companies and entities investing in India were placed under an automatic system, wherein the authorities were informed of the investments only once the transactions were made.

How will India guard its initiative?

A possible change in the investment patterns is expected on behalf of Chinese firms, to put a check on this, restrictions are placed on any investment via China and also stop redirected investment attempts via Hong Kong, Singapore or other countries.

Source :

Referred from Walling off China: India changes FDI policy to block threat of takeovers, by Sidhartha | TNN | Updated: Apr 19, 2020, 11:58 IST, http://timesofindia.indiatimes.com/articleshow/75227752.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst