SIGNS OF SPRING

With diplomatic relations between India and China showing signs of a thaw, will trade and investments look up? Officials have indicated that India will not ease FDI norms for Chinese firms just now, but will 2025 change this status quo?

- SURABHI

THAT "MAY YOU live in interesting times" is an English translation of a Chinese curse is apocryphal. However, what is true is that we are living in interesting times. Two wars are in the headlines daily, and scores of armed conflicts across the globe. In the US, Donald Trump will take office as the 47th President on January 20, 2025, and could spark trade turmoil with China and India.

Economy watchers, meanwhile, are keen to see trade and investment ties between India and China go back to the pre-2020 days. During the Covid-19 pandemic's lockdown in March 2020, India banned all direct passenger flights between the two countries. Then came the diplomatic freeze after the June clashes in Galwan in Ladakh in which 20 Indian soldiers were killed.

Indian businesses are sensing a thaw in diplomatic relations between India and China and expect Delhi to lift curbs on investment by Chinese companies-even though the government has ruled out such plans for now, citing Press Note 3 of 2020. This Press Note revised a clause of the Consolidated FDI Policy 2017 to rule out investment by any Chinese company except through the government route. It does not name China but excludes any entities of a country "that shares a land border with India" or where the beneficial owner of an investment into India is situated or is a citizen of any such country.

The government said it wanted to check opportunistic takeovers of Indian companies during the pandemic.

"As of now, there is no rethink on this issue; the amendment to the FDI rules was brought in after much thought was put into safeguarding strategic sectors and interests," said official sources.

The first signs of a thaw