India Warms Up to Chinese FDI on Renewables, Auto Parts

India has identified manufacturing, renewable energy and auto components for relaxing covid-era curbs on Chinese investments, as the Asian heavyweights warm up to each other under the heat of Trump's tariffs.

- Dhirendra Kumar & Rituraj Baruah

The government is considering a plan to allow 20-25% Chinese investments in these sectors through the automatic route, two officials involved in the process told Mint on condition of anonymity.

Under India's Press Note 3 notification in 2020, investments from neighbouring countries require New Delhi's approval involving tight scrutiny, a move targeted primarily at China. But US President Donald Trump's increasing tariff pressure on China and India has pushed the two economic giants closer.

The relaxations in India's foreign direct investment (FDI) rules are expected to be announced shortly, as Prime Minister Narendra Modi visits China for the Shanghai Cooperation Organization summit, the officials said.

"Sectors such as defence, security, strategic installations, exploration, and telecom installations have been kept out of the proposal," one of them said.