China says India's new FDI rules violate WTO principles on free and fair trade; hopes for revision in 'discriminatory practices'

India’s new rules for foreign investment violate WTO principles of non-discrimination and are against free and fair trade, a Chinese embassy spokesperson in New Delhi said on Monday

FP Staff April 20, 2020 14:46:12 IST
China says India's new FDI rules violate WTO principles on free and fair trade; hopes for revision in 'discriminatory practices'

India’s new rules for foreign investment violate WTO principles of non-discrimination and are against free and fair trade, a Chinese embassy spokesperson in New Delhi said on Monday.

The impact of the policy, introducing "additional barriers", was clear on Chinese investors, the official said, adding that India's action was also against the consensus arrived at the G20 to realise a free, fair and non-discriminatory environment for investment.

"The additional barriers set by Indian side for investors from specific countries violate WTO''s principle of non-discrimination, and go against the general trend of liberalisation and facilitation of trade and investment," Chinese embassy spokesperson Ji Rong said in a statement, PTI said.

On Saturday, India stepped up scrutiny of investments from companies based in neighbouring countries, in what is widely seen as a move to stave off takeovers by Chinese firms during the coronavirus outbreak.

“The impact of the policy on Chinese investors is clear,” a spokesperson of the Chinese embassy Ji Rong said in a statement, a Reuters report said. Rong said China hoped that India would revise the "relevant discriminatory practices" and treat investments from different countries equally while fostering an "open, fair and equitable" business environment.

Click here to follow LIVE news and updates on stock markets

India's decision to tighten norms for FDI came amid reports of China eyeing to takeover several Indian entities following fall in their valuation following economic downturn in the wake of the pandemic. India’s trade ministry said in a notification dated 17 April the changes to federal rules on investment were meant to curb “opportunistic takeovers/acquisitions”. It did not mention China.

"The additional barriers set by Indian side for investors from specific countries violate WTO's principle of non-discrimination, and go against the general trend of liberalisation and facilitation of trade and investment," Chinese embassy Spokesperson Ji Rong said in a statement.

She said China hoped that India would revise the "relevant discriminatory practices" and treat investments from different countries equally while fostering an "open, fair and equitable" business environment.

"Chinese investment has driven the development of India's industries, such as mobile phone, household electrical appliances, infrastructure and automobile, creating a large number of jobs in India, and promoting mutual beneficial and win-win cooperation," Ji said, PTI said.

The spokesperson said China's cumulative investment in India has exceeded $8 billion, noting it is far more than the total investments by countries sharing border with India.

She said India's new policy will make it difficult for companies from countries sharing land border with India, including China, to invest in India, adding decisions by companies to invest depends on a country's economic fundamentals.

"Facing the economic downturn caused by COVID-19 , countries should work together to create a favourable investment environment to speed up the resumption of companies' production and operation," she said.

The ballooning trade deficit in China's favour has also been a major issue for India.

The trade deficit in 2018, according to Chinese official data, climbed to $57.86 billion from $51.72 billion in 2017. India has been pressing China to import more Indian goods, especially pharmaceutical and IT products.

China hopes India will revise ‘discriminatory practices’, treat investments from different countries equally, the spokesperson said.

--With inputs from agencies

Updated Date:

also read

Tokyo Olympics 2020, Form Guide: Tracking Indian women's hockey team over last two years
Sports

Tokyo Olympics 2020, Form Guide: Tracking Indian women's hockey team over last two years

Tracking the Indian women's hockey team's fortunes over the last two years heading into Tokyo 2020 Olympics

Tokyo Olympics 2020, Form Guide: Tracking Indian men's hockey team over last two years
Sports

Tokyo Olympics 2020, Form Guide: Tracking Indian men's hockey team over last two years

Firstpost.com charts the the Indian men's hockey team's fortunes over the last two years heading into Tokyo 2020 Olympics.

Firstpost Explains: Two golds? Two silvers? How COVID-19 could make hockey event at Tokyo 2020 an unusual affair
Sports

Firstpost Explains: Two golds? Two silvers? How COVID-19 could make hockey event at Tokyo 2020 an unusual affair

Two golds in hockey at Tokyo 2020? Two silvers? Firstpost Explains how COVID-19 could make the hockey tournament at Tokyo Olympics an unusual affair