There are 105 Chinese companies registered in India, of which 92 of them have an ‘active’ in status as of March 2021, the government informed Parliament. This was in response to a question raised by Shardaben Anilbhai Patel and Mitesh Rameshbhai Patel Members of Parliament from Bharatiya Janata Party.
Anurag Singh Thakur, Minister of State for Finance and Corporate Affairs said that the 105 companies were registered under the Companies Act, 2013 with approval from the Reserve Bank of India as per provisions of the Foreign Exchange Management Act. A total of 2,488 forms related to Foreign Direct Investment (FDI) inflows were reported in Form FC-GPR (to be filed with 30 days from the date of allotment of equity instruments to residents outside India) and 140 inflows were reported in form FC-TRS (to be filed with 60 days from the date of transfer/order of remittance), the minister said.
Chinese investments and companies, particularly those with stakes in technology companies and startups in India, have been viewed with increased hostility in the past year ever since there were border clashes between the Indian and Chinese army. The first instance of this was the government’s move to ban TikTok and hundreds of other apps by Chinese companies, citing national security and data privacy.
In April 2020, the Department for Promotion of Industry and Internal Trade (DPIIT) amended the FDI policy to ensure that any FDI investment from China is brought under the Government approval route. The Indian government effectively brought all foreign investments from countries that it shares borders with — read China — under government approval. This had an impact on prominent investment deals such as Ant Group’s investment in Zomato, which was put on the hold for months.
Even before the notification, total FDI inflows from China had contracted by 64.5% between FY16 and FY20. Between April 2015 and March 2020, China invested US$354.93 million (~₹2609.71 crore) in Indian telecommunications, electronics, information and broadcasting, electrical equipment, and computer software and hardware. Of this amount, 91% was invested in the sectors of electrical equipment and electronics and a mere 0.5% ($1.74 million) in telecommunications, Thakur had informed Parliament back in September 2020.
Investments from Chinese companies into Indian startups are now viewed as a hassle, and investors have reportedly begun to look at investors from other countries as a safer option. Consider Nodwin Gaming, which recently raised funds from Krafton, a South Korean gaming company. Nodwin’s managing director and cofounder Akshat Rathee said a chief reason his company accepted the investment was because it resides in a country that doesn’t seem to have any issues with anyone else in the world.
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