India, China explore new investment framework; outlay package may be unveiled during BRICS summit: Report

India and China are reportedly exploring a new investment framework to facilitate business-to-business exchanges and accelerate Chinese investments. The two neighbours aim to revive commercial ties amid a broader thaw in diplomatic relations.

According to a report in The Economic Times that cited sources familiar with the developments, Beijing may unveil an investment package for India during Chinese President Xi Jinping's visit for the BRICS summit on September 12-13. Xi is expected to meet Prime Minister Narendra Modi in New Delhi. The groundwork for the meeting was laid during National Security Adviser Ajit Doval's recent visit to Beijing, the report added.

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Among the proposals under discussion is a special economic zone with easier access to sea routes. Greater access for Chinese electric vehicle makers, including BYD, to the Indian market is also likely to be a key element.

Another proposal involves setting up an export processing zone in India with Chinese funding, which could facilitate exports to third countries. Beijing is keen to use Xi's first India visit since 2019 to announce possible investments, including in the proposed export processing zone.

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The overall investment package may not be large, as both sides remain focused on gradually improving relations and managing differences following a six-year freeze. India is also examining further easing of approval processes for Chinese investments in non-strategic sectors, although restrictions would remain on projects along the Line of Actual Control, defence, and other sensitive sectors, it said.

New Delhi is seeking assurances from Beijing for smoother access to technology and critical raw materials. Efforts are under way to make these supply routes more predictable and strengthen access for Indian industry, as per the report. India is also pushing for greater Chinese investment and increased imports from India, including industrial goods, to help narrow the countries' large trade deficit.