As military tensions at the India-China border ease and both nations pull back their troops, India is to clear 45 investment proposals from China.
About 150 investment proposals worth $2 billion were held up since last year due to disputes and tensions at the border between the two nations. In retaliation against the Chinese troop's incursions, India had also banned more than 50 Chinese mobile apps.
Since the inter-ministerial panel led by the home ministry began scrutiny of such foreign proposals, companies from Japan and the US that direct their investment through Hong Kong were also caught in the cross-fire.
The Union Home Ministry has not yet made any comments on its decision to clear the 45 Chinese proposals. According to the two government sources that had had access to the list, most of the proposals allegedly belong to the manufacturing sector which is regarded as non-sensitive in terms of national security.
The proposals likely include those from Great Wall Motor and SAIC Motor Corp, government and industry sources. Great Wall and General Motors (GM) made a joint proposal last year seeking consent for the Chinese automaker to purchase the U.S. company's car plant in India, in a deal expected to be valued at around $250-$300 million.
Great Wall, which plans to invest $1 billion in India over the next few years has announced that after getting relevant approvals and investment clearances, the company plans to begin selling its cars in India from this year and also introduce electric vehicles in the country.
SAIC Motor Corporation Limited, the Chinese state-owned automotive design and manufacturing company, which started selling cars in India in 2019 under its British brand MG Motor has invested around $400 in India and is awaiting approval to make further investments.
Indian government's decision to clear these proposals suggests a positive step in the months-long border tensions between the two countries. Troops from both countries have withdrawn from the conflicted border area and a joint statement announced that both sides will now focus on resolving the remaining issues.
The plan is to split the more than 150 Chinese investments into three categories based on the risk it poses to the national security. Automobiles, electronics, chemicals and textile sectors are seen as non-sensitive and therefore proposals from these sectors will be approved faster. But those proposals involving data and finance are deemed sensitive and will be thoroughly reviewed before approval.