India planning to check Chinese FPI flows post altering FDI rules

Earlier in May, the Central government altered FDI rules to prevent Beijing baked Chinese investors entering Indian market

The government is now planning to check the alternative way from where Chinese investors could enter — Foreign Portfolio Investment (FPI)

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Earlier in May, the Central government altered the FDI rules to check investments coming from China. It is feared that state-backed Chinese investment may spur up in the Indian market amidst the economic meltdown led by Covid-19 pandemic. Now, the government is planning to check the alternative way for the Chinese investors trying to enter the Indian market. As per the recents reports available, the Centre is in talks with the markets regulator SEBI on how to alter the FPI provisions. The FDI development came after the NSA Ajit Doval flagged the concern that Beijing through its bogus investments firms might swallow up its investments in India through cash hungry Indian startups. The new FDI rule mandated all the neighbouring countries to seek approval from the authorities before making FDI investments in India. However, it is China that is targeted through this new rule.

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