India may lower its Chinese trade wall

Several items in non-sensitive areas may open up for trade

- BY S VENKAT NARAYAN Our SPECIAL CORRESPONDENT

Ahead of Prime Minister Narendra Modi'’s visit to China, India is weighing easier rules for Chinese investments in select sectors, in another step to restore ties and bolster trade, amid US tariff uncertainty.

According to people aware of the matter, the proposal under consideration is to identify nonsensitive areas such as specific segments of manufacturing, renewable energy, and consumer goods. Investment proposals from Chinese companies in such sectors can be cleared through a faster and simplified approval process.

“Talks are underway at the diplomatic level to find a workable solution, keeping sensitive sectors, such as defence and telecom, and critical digital infrastructure, to ensure that national security is not compromised even as economic benefits are realised,” the Mint newspaper quoted them as saying.

They spoke on the condition of anonymity.

“As there is no plan to review Press Note 3, investments from China will be considered through the government approval route and not via the automatic route,” they said.

Under Press Note 3, investments from countries sharing a land border with India must be approved by the government first.

India restricted such investments after the deadly clash between the soldiers of the two nations in Ladakh’s Galwan Valley in 2020. Still, trade continued to grow as India relies on its neighbour for imports of pharmaceutical raw materials to electronic parts.