Chinese FDI has been coming down in 3 years

Despite the government issuing curbs on FDI from Chinese entities, both inflow and outflow between China and India has been tapering in the past few years, as per government data.

The total FDI inflow from Chinese companies in India stood at $350 million in 2017-18. In 2018-19 it shrunk to $229 million and $163 million in 2019-20. In 2015-16, Chinese FDI inflows were higher at $461 million. In the past five years, the total FDI inflow aggregated to $1482 million.

Automobile industry was the biggest recipient of Chinese investment of $499 million in these five years. Electrical equipment received $176 million and electronics got $146 million. Non conventional energy too has received investments from China.

Though their investments are small in size, Chinese investors have stakes in several tech unicorns.  Byju’s, BigBasket, Delhivery, Flipkart, Hike, Makemytrip, Oyo, Ola, Paytm, PolicyBazaar, Quickr, Snapdeal, Swiggy, Udaan and Zomato.  

The total FDI outflow into China too has been coming down over the years.  It stood at $49.19 million in 2017 and has shrunk to $20.63 million by 2020.

Post the stand-off in Ladakh, the government had issued Press Note 3 in order to curb opportunistic takeovers/acquisitions of Indian companies by investors from neighbouring countries due to the Covid-19 pandemic.

Any such investment could not be done through automatic route and had to undergo government scrutiny. In the event of the transfer of ownership of any existing or future FDI in an entity in India will also require Government approval.