India is reportedly considering easing restrictions on Chinese investment in non-sensitive sectors like solar panels and battery manufacturing.
The move is on the ground that domestic expertise in these sectors is lagging behind, which hinders domestic manufacturing.
The Indian government plans to free up sectors to Chinese investment that it deems less sensitive from a security point of view, Reuters reported, citing unnamed government officials.
The plans mark a first step in improving economic ties between the two neighbours, a relationship that worsened after clashes in the remote Himalayan border in 2020.
Post border clashes, India tightened scrutiny on investments from Chinese companies.
The non-critical sectors “would be decided on a case-to-case basis”, but curbs on Chinese investments in electronics and telecom would continue, the report said.
Reuters said the prime minister’s office, foreign, finance, home and trade ministries did not respond to its requests for comments.
Top government officials have been open to reviewing their stance against Chinese investment in the last few months as foreign investment has fallen to 17-year lows.
Finance Minister Nirmala Sitharaman’s support of better economic ties with China on Tuesday, while presenting the FY25 budget, was the first such public comment made by a ranking cabinet minister in the Modi government.
On Monday, Chief Economic Adviser V. Anantha Nageswaran said New Delhi could promote foreign direct investment from China to boost India’s exports.
The plans, if confirmed, could unlock investments from Beijing worth billions of dollars that were blocked by India over the last four years.
India has also virtually blocked visas for Chinese nationals since 2020, but may ease these restrictions for Chinese technicians as the move has hindered investments.
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