India does not intend to encourage foreign direct investments (FDI) from China, Commerce and Industry Minister Piyush Goyal said on Friday, indicating New Delhi's intentions of not easing overseas investment curbs imposed on the neighbouring country in 2020.
FDI applications from countries sharing land borders, such as China, have to mandatorily seek government approval for all sectors. This policy was issued in April 2020.
"As of now, there's hardly any foreign direct investment from China...It was the same 25 years ago when it (FDI) was open (from China), not too much Chinese investment has come to India. Nor are we encouraging any significant investment coming in from China at all. At the moment, that is the policy," Goyal said here at an event.
The remarks assume significance as certain quarters are of the view that the rule needs to be eased to attract technology and capital.
In 2020, the government made its approval mandatory for FDI from countries that share land borders with India.
Also Read
India's outward FDI up 20% at $5.81 bn in March 2025, shows RBI data
Govt clarifies rules on issuing bonus shares to existing foreign investors
Indian firms in FDI-ban sectors can issue bonus shares to existing NRIs
Net FDI dips to $1.4 bn in Apr-Jan 2025; gross FDI rises 12.4%: RBI data
Growth in net sales of FDI companies moderated to 9.3% in FY24: RBI
Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.
China stands at the 22nd position with only 0.37 per cent share (USD 2.5 billion) in the total FDI equity inflow reported in India from April 2000 to March 2024.
Last year, the pre-budget Economic Survey made a strong case for seeking FDI from Beijing to boost local manufacturing and tap the export market.
Goyal also said that India's effort is to integrate its economy with the developed world, who believe in fair play and follows honest business practices, and where domestic industries get an equal opportunity to do business.
"Everything will be based on reciprocity. Everything will be based on mutual trust and mutual benefit. And therefore, I personally, don't see any great disturbance say even except for a short period of time. I think this reset that the world is going through is actually very good for the world," he said.
He added that the genesis of this tariff problem goes back to the late 1980s and mid-1990s.
"Then China was accepted into the World Trade Organization and MFN (most favoured nation) benefits were given to China by all countries of the world, collectively with the desire and hope that we could trust them to behave better.
"Sadly, that never happened. And over the years, country after country and industrial sector after sector has realized how their practices have hurt businesses and economies," he said.
He added that in 2019, India decided not to join the Regional Comprehensive Economic Partnership (RCEP) as it felt that the guiding principles on which free trade should work were not being respected in that grouping. China is part of RCEP.
And today it is being vindicated by the current situation in the world, he said.
When asked if there is any pressure because of this relationship, China is not sending engineers or specialized workers to India, Goyal said India has a huge talent pool as it produces the highest number of STEM (science, technology, engineering, or mathematics) graduates every year.
"And very often, necessity encourages innovation. Necessity drives people to outperform themselves. And therefore, should there be a situation where any such undue pressure is brought on the Indian ecosystem? Our Indian people are very competent to come out of it and innovate in R&D and create solutions for our own needs, which will, I think, probably be better than what China can offer us," he added. E-commerce moratorium in WTO needs to be well defined
Minister also said- The WTO members need to clearly define a moratorium on imposing customs duties on e-commerce trade, as its extension is impacting countries like India to develop its own ecosystem in the digital trade sector.
The World Trade Organisation (WTO) members have agreed not to impose customs duties on electronic transmissions since 1998 and the moratorium has been periodically extended at successive ministerial conferences (MC), which is the highest decision-making body of the 166-member body.
India has time and again emphasised the need to discuss the scope of the duty moratorium as there are revenue implications because of it.
"We are not, per se, against it. (But) our problem is that we had an ITA-1 (Information Technology Agreement) earlier, which did not properly define (that) what comes within the ITA, and it kept getting expanded to cover more and more items causing loss or the lack of ability for countries like India to develop our own ecosystem.
"So, I think e-commerce moratorium needs to be well defined, what it will cover, and limited that and what it will not cover, but anything beyond that also will not be covered," he said here at an event.
The minister also said that India has always believed in multilateral organisations and it has supported them as they have a "very" important role to play.
India will continue to work within the framework of global rules of business and trade, but "I think the WTO will have to also reform itself on a few items", he said.
Citing examples, he said there is a need to fix a benchmark for defining or categorising a WTO member as a "developing" country.
If a country having a per capita income of USD 50,000 or USD 1,00,000 chooses to self-declare itself as a developing nation, "it is going to cause angst amongst the rest of the world, or the developed world", he said.
Goyal added that actually it causes angst even for developing countries because those people hurt the interests of other developing economies.
"...the developed world then takes a macro view, or the lens of the developed world towards the developing countries gets tainted," he said, adding that "it would be only fair that some kind of a benchmark could be set, or at least those countries who have now reached pretty good levels of prosperity take a more realistic view of their own status".
He also said that certain decisions taken over 10 years ago on agriculture have still not been implemented.
"Unless those get implemented, how can we move forward to other areas? So, in fisheries, we are trying to come to a consensus without really addressing the real problem of overfishing in the waters," the commerce minister said.
Connect with us on WhatsApp
More From This Section
IIP growth slows to 6-month low of 2.9% in February on weak manufacturing
India focuses on green tech, infra, mobility to boost bilateral ties: FM
India's vegetable oil stocks drop to three-year low on lower palm imports
India's forex reserves rise by $10 billion on inflows, revaluation
India, US agree on terms of reference for first phase of trade deal
For enhanced bilateral relations between India and Austria, India has identified areas such as green and digital technologies, infrastructure, renewable energy, water management, life sciences, as well as electric mobility and transportation, Union Finance Minister Nirmala Sitharaman on Friday said.
Addressing the India-Austria business roundtable in Vienna, she said Austrian companies should utilise opportunities India offered as the country had made progress as a result of the government’s efforts in accelerating growth and equity as well as reforms to ensure the ease of doing business.
“I highlighted emerging opportunities in new and emerging sectors such as green hydrogen, electric vehicles, digital public infrastructure and innovation. India is an excellent gateway to Asia and the Global South,” she said.
Talking about startups and innovation, Sitharaman said these were a key priority for both governments. India has over 110 unicorns and several thousand successful startups, she said, adding Austria too had a well-recognised startup ecosystem.
Sitharman urged Austrian companies to invest in India.
Also Read
FM Sitharaman invites Austrian firms to invest in emerging sectors in India
'Eagerness' on both sides to conclude India-UK FTA: FM Sitharaman
UK to support India in the internationalisation of rupee currency
India to be 6th largest insurance market by 2032, says FM Sitharaman
FM Sitharaman woos UK investors, highlights India's growth, reform push
She said the prospects for a stronger economic and commercial partnership between the two countries were bright. Stressing that India had the manufacturing base and scale, she said several Austrian companies had set up capability centres in India to leverage the digital and IT (information technology) talent in India.
Recalling Prime Minister Narendra Modi’s visit to a European country last year, she said it was a milestone in the India-Austria partnership, especially in strengthening economic and commercial links.
During her bilateral meeting with Austrian Finance Minister Markus Marterbauer, Sitharaman discussed issues in the financial, economic, trade and investment areas.
Moreover, Vienna cited the “strain” caused by tariffs imposed by America and urged strengthening economic cooperation with partner countries.
The Austrian Federal Ministry of Finance issued an update on Sitharaman’s meetings with Marterbauer and State Secretary Barbara Eibinger-Miedl on Thursday.
“The US tariff and trade policies are putting a strain on the European and Austrian economies. This makes it all the more important to strengthen economic cooperation with all partner countries and promote innovation-driven collaborations,” said Marterbauer.
“India is the fastest-growing economy of all G20 countries, with projected GDP (gross domestic product) growth of over 6 per cent. If trade takes place in fair and sustainable conditions, both partners will benefit,” he said.
As an export-oriented economy, Austria said it had always been committed to common international rules and standards on prosperity and stability.
Sitharaman invited Marterbauer to visit India with a business delegation.
She is in Austria as part of her two-nation tour, which started in London for the India-United Kingdom Economic and Financial Dialogue earlier this week.
Connect with us on WhatsApp
More From This Section
India's vegetable oil stocks drop to three-year low on lower palm imports
India's forex reserves rise by $10 billion on inflows, revaluation
India's outward FDI up 20% at $5.81 bn in March 2025, shows RBI data
India, US agree on terms of reference for first phase of trade deal
IIP growth slows to 6-month low of 2.9% in February on weak manufacturing