Fair business environment serves both sides

It is only natural that multinational companies should wish to invest in India, given its large and steadily growing domestic market, ample supply of inexpensive labor and stable economic growth. But the restrictive policies the country has introduced have created a barrier for Chinese companies.

As a result, Chinese companies are having second thoughts about investing in the country. For instance, a 2023 plan by China's major electric vehicle maker BYD to invest $1 billion in a joint venture in India has been shelved.

It is because of the restrictive policies and practices, some of which are also applicable to foreign entities from other countries, that gross FDI in India, which includes reinvested earnings and equity inflows, fell to $71 billion in 2023-24, the lowest since 2018-19, according to data from the Reserve Bank of India. That prompted the Indian government to consider last year expanded measures to allow greater flexibility for strategic foreign investors to buy stakes in local companies.