REJECTING CHINA

With denial of investments, tighter regulations, rapid import substitution and crackdown on misdeeds of companies, India is giving it back to China like very few nations have. How far is this economic blockade going?

- ASHUTOSH KUMAR

ON APRIL 11, 2020, a shade over two weeks after India went into an unprecedented national lockdown due to Covid, a filing on the Bombay Stock Exchange by India's biggest mortgage lender HDFC Ltd. sent shockwaves all the way to North Block. HDFC informed that China's central bank, People's Bank of China (PBOC) had acquired 1.75 crore additional shares in the company, upping its stake to 1.01%.

Amid the Covid meltdown in equity markets, HDFC's share price had eroded 35% between February and April 2020. On the face of it, PBOC's move was a case of bottom fishing by a Chinese institution amid attractive valuations. However, the concern for Indian policymakers was a deeper one — opportunistic takeovers by Chinese firms (many of which are believed to be controlled by the state through non-transparent links) of Indian companies available relatively cheap.

With that began the Centre's overdrive to keep China in check. In the three years since, India's policy of maintaining status quo despite Chinese excesses, lest the dragon be irked, has long receded into the horizon and a proactively protective, even aggressive, stance in favour of indigenous businesses and economic interests has been accorded primacy.