Maximize inflows of FDI but run a security check

Easing investment from border-sharing countries could revive Chinese interest and serve India's export ambitions but let's keep electronic components under watch for hidden risks

- 

(STOCK PHOTO)

It is welcome that India is liberalizing inward investment from countries that share a land border with India. Investments up to 10% of a company's paid-up capital that involve no board-seat control will be allowed under the automatic route. Investment proposals that need government approval would also be fast-tracked for nods within 60 days in specified sectors, including the manufacture of capital goods, capital goods for electronics, electronic components, polysilicon and the conversion of polysilicon into ingots and their slicing into wafers. A precondition is that the investee company should be majority owned and controlled by Indians or Indian entities. The move eases curbs imposed back in 2020 and signals a lower guard against the role played by Chinese capital in India's economy.