Commerce and Industry Minister Piyush Goyal has clarified that India remains steadfast in its position regarding foreign direct investments (FDI) from China. His statement comes in response to recent recommendations made in the Economic Survey.
The Economic Survey for 2024 outlined two paths for India to become a global manufacturing hub: increasing imports or attracting more FDI from China. Given India’s substantial trade deficit with China, Chief Economic Adviser V Anantha Nageswaran deemed the latter option more beneficial. Encouraging Chinese investments would help reduce this deficit and foster domestic technical expertise. The survey also highlighted the potential benefits of India adopting a “China plus one strategy.”
Despite these recommendations, Minister Piyush Goyal emphasized that the Economic Survey is not binding on the government. He stated, “There is no rethinking at present to support Chinese investments in the country.” He further clarified that the report merely presents new ideas and outlines its own thinking.
Tensions between India and China escalated significantly after the border clash in the Galwan Valley in June 2020. While both sides have disengaged from several friction points, a full resolution of the border issue remains elusive. India has maintained that normalizing relations with China depends on peace in the border areas.
India’s decision to ban over 200 Chinese mobile apps, including TikTok and WeChat, reflects the strained relations. However, the Competition Commission of India recently cleared JSW Group’s proposed acquisition of a stake in MG Motor India Pvt Ltd.
China remains India’s largest trading partner, with two-way commerce reaching USD 118.4 billion in 2023-24, surpassing the US. India’s exports to China increased by 8.7% to USD 16.67 billion in the last fiscal year, while imports from China rose by 3.24% to USD 101.7 billion1.
Minister Piyush Goyal’s assertion underscores India’s stance on FDI from China, even as the economic landscape continues to evolve.
