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With the opportunistic takeover of indigenous companies by their Chinese counterparts becoming a reality due to the prevailing coronavirus
pandemic, the Ministry of Commerce and Industry, in a bid to protect Indian
companies have amended the Foreign Direct Investment (FDI) Policy, 2017
and made it mandatory for a state that shares land borders with India or
where the beneficial owner of investment into India is situated in or is a
citizen of any such country shall invest only under the government route,
regardless of the sector or activities in which such investment is being
made.

The author sagaciously comments,” To sail through the slowdown-hit economy, the
amendment comes across as a step in the right direction. However, there
are uncertainties involved in the execution of the amendment, which may
disadvantageously impact the Indo-China relationship in the global market.”
In the backdrop of People Bank of China’s acquisition of HDFC Bank’s
stakes, this policy amendment has set the tone for the future of India-China
relations. The Indian government has essentially attempted to send a
message to her Chinese counterparts that the government at the centre will
protect indigenous companies from incoming opportunistic foreign
investment and ensure that “the businesses keep running”.

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