Departments asked to approach Chinese FDI proposals with caution

Foreign Direct Investment (FDI) proposals from China must be approached with special auction, India’s security establishment advised various departments.

According to a report in The Economic Times, the security establishment is advocating a cautious approach to blanket approval for FDI proposals from China. Sources told the daily that there must be review and monitoring through robust IT tools and databases when it comes to FDI from countries of concern. 

The departments have been asked to formulate a system, after which disposal of cases should be done in a time bound manner. 

National security should not be overlooked while advocating unhindered FDI from countries of concern, sources explained. Desirable investments that can contribute to access to new technologies and domestic value addition should be encouraged and approved, they said.

Sources also pointed out to the financial daily that pre-entry mechanisms are not the only part of improving the investment climate in the country. Facilitating FDI also requires supporting investors in setting up their business activities after they bring in their money into the country.