India Subjecting FDI Proposals from Hong Kong at Par with China Amid Border

People familiar with the matter said that as part of a new policy, India is accepting foreign investment proposals from Hong Kong, which requires approval of plans from countries that share land boundaries.

The person familiar with the matter said that in accordance with the rules for talking with the media, anonymity was requested, and nearly 140 investment proposals with a total value of more than 1.75 billion US dollars were shelved, most of which came from mainland China and the Hong Kong Special Administrative Region.

In the border confrontation with China, the Indian government tightened the foreign direct investment regulations of all countries that share land borders, and conducted strict scrutiny of such investments-this restriction previously only applied to Pakistan and Bangladesh.

Delays can make it difficult to trade and affect the flow of capital from private equity firms and hedge funds, which often include investors based in China or Hong Kong. This could lead to Indian firms losing investment in the midst of a pandemic-induced economic downturn.

Curbs also apply where the beneficial owner of the proposed development is located in one of India's neighbors. The government panel set up to approve these proposals has not yet decided on rules, including beneficial ownership.

A spokesman for the Ministry of Trade and Industry did not immediately answer the cell phone.

Tensions between the two giant Asian economies have been mounting since May. Twenty Indian soldiers and an unknown number of Chinese soldiers were killed in the clashes along the Himalayan border earlier this year.

The military crisis is the worst since both sides went to war in 1962. India responded by banning Chinese applications, tightening visa rules for Chinese citizens, and imposing restrictions on companies from countries sharing a land border in government contract tenders.

Earlier last month, Foreign Minister Subrahmanyam Jaishankar told Bloomberg News that trade with China cannot continue as normal as long as there are unresolved issues along the border - the contested kilometer (2,167 miles). stretching called the line of actual control.