FDI policy changed to prevent China: The Tribune India

0
92


News Service Grandstand

New Delhi, April 18

Days after a Chinese bank picked up shares in HDFC, India’s second largest private bank, at extremely low rates, the government changed foreign direct investment (FDI) policy on Saturday to avoid a similar predatory approach in the future. Congress chief Rahul Gandhi immediately thanked the government for “taking note of my warning” and changing the standards for FDI, making government approval mandatory in specific cases.

Extension of restrictions

Under the revised standard, restrictions on Bangladesh and Pakistan have been extended to include all neighbors sharing the land border with India

Tightening FDI standards to prevent China, which has more than $ 3 trillion in foreign exchange reserves, is a global trend. Germany, Italy and Australia are modifying their FDI laws to protect their industries, which falter under the impact of the Covid pandemic and are mature takeover targets.

The Indian government has sought to remove Chinese companies by slightly modifying paragraph 3 of FDI policy. The new addition reads as follows: “An entity of a country which shares a land border with India or where the beneficial owner of an investment in India is located or is a citizen of one of these countries, may not invest only through government channels. ” This means that all countries that share borders with India must obtain government approval to invest.

The import is clear. With the exception of China, no other neighboring country has the capacity to make large investments.

The People’s Bank of China bought 1.75 crore shares, or 1.01% of HDFC’s stake between January and March. The case came to light after the HDFC submitted the information to regulators. From 2,500 per share, the impact of Covid resulted in a 30% loss in the value of HDFC shares. This saw Rahul Gandhi on social media on April 12.

“The economic downturn has weakened many Indian companies, making them targets for takeovers. The government should not allow foreign interests to take control of an Indian company during this time of crisis, “he said.

.



LEAVE A REPLY

Please enter your comment!
Please enter your name here