Net inflows from China drop to lowest in five years to $163.77 million
Net inflows into India from China dropped to the lowest in five years in fiscal year 2019-2020, according to data from the finance ministry.
Net inflows from China stood at $163.77 million during FY19-20, as against $461.40 million in FY15-16, data shared by the finance ministry on the first day of the monsoon session of Parliament showed.
Sectorwise data showed that the majority of the inflows for 2019-2020 came from the Electronic and Electrical Equipment sector, at $54.02 million and $30.07 million respectively.
The Automobiles sector also saw inflows falling to a 5-year low of $10.08 million in FY19-20, a huge drop from the $327.69 million received in FY15-16.
The Services sector also saw the biggest dip in four years, with only $14.21 million in the last fiscal as compared to $92.20 million in 2016-2017.
Net outflows for 2019-2020 stood at $20.63 million.
Responding to whether the government has any proposal to not accord any permission to any Chinese firms to invest in India, the finance ministry said that a non-resident entity can invest in India, subject to the Foreign Direct Investment (FDI) Policy except in those sectors/activities which are prohibited.
However, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.
Addressing the transfer of ownership, the ministry also added that subsequent change in beneficial ownership will also require government approval.
On April 18, The government amended the FDI policy to discourage opportunistic investment in Indian companies by neighbouring countries in the midst of the Coronavirus pandemic. The move came shortly after China's central bank recently raised stake in Housing Development Finance Corporation (HDFC) to a little over 1 percent.
India and China have been involved in a tense border dispute for many months now, and there have been calls for a complete boycott of Chinese imports into India.
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