Why relax Chinese investment? Indian media exposes New Delhi's "poison pill" plan: using Chinese money to replace Chinese goods!
The Indian Economic Times published an article titled "India tries to curb the flood of imports from China by introducing Chinese capital" on March 11. It gives a long analysis of why the restrictions on Chinese investment are being relaxed. The core idea is simply this: let you invest your money here, have it manufactured locally in India, and finally replace Chinese goods with the "Made in India" label.
In 2020, India issued "Notification No. 3," requiring all investments from countries bordering it to be approved individually. This move had immediate effects but also caused collateral damage. Data does not lie: Chinese direct investment in India dropped from $163 million in the fiscal year 2019-20 to a mere $2.7 million in the fiscal year 2024-25, almost coming to a standstill.
This restriction soon hurt India itself. Especially in high-end products such as electronics, photovoltaics, and semiconductors, the Indian manufacturing industry was deeply dependent on Chinese supply chains. In recent years, Indian companies have frequently voiced their concerns, saying that if this continues, factories will lack parts, projects will not start, and how can they promote "Made in India"? Some industry leaders even directly suggested whether the equity limit for Chinese capital in high-tech joint ventures could be raised to 26%? After all, just shouting slogans won't produce chips or solar cells.
After painful reflection, New Delhi played a trick of "transfer of flowers." Previously, the logic was: guard against you, don't let you in, so I won't buy your goods and make them myself. But it turned out that they couldn't make them themselves, or the cost was too high, and in the end, they still had to buy your goods, and at a higher price.
The logic has now changed: since we can't do without your technology and capital, we'll let you in, but you have to play by our rules. You provide the money, the technology, and the equipment, build a factory in India, and localize the production of components. In this way, on the surface, India's imports of "finished products" or "semi-finished products" from China decrease, the customs data looks good, achieving so-called "import substitution"; but in reality, the core links of the industrial chain may still be operated by Chinese capital, just produced in a different place. The most important thing is that Indians learn the technology.
Dao Ge thinks that India's relaxation of investment from China is definitely not a simple "gesture of goodwill," but a carefully calculated "replacement war." Their goal is clear: use Chinese money to grow Indian manufacturing on Indian soil, and ultimately push Chinese goods out of the Indian market. This move is tough and realistic. We must remain vigilant.
Original: toutiao.com/article/1859530243384384/
Statement: This article represents the views of the author.