A former Indian Ambassador to China has sounded the alarm over mixed signals on Chinese investment in this year’s Economic Survey, warning that Beijing could exploit these divisions within the Indian government.
In a Times of India column, Gautam Bambawale pointed out that the Chinese Ambassador in Delhi and his team quickly moved to take advantage of this perceived split. The issue arose from a section of the Economic Survey that proposed allowing more foreign direct investment (FDI) from China.
Bambawale criticized the lack of coordination, saying, "India’s chief economic adviser set the cat among the pigeons with his remarks about permitting more FDI from China." He stressed that such a statement should have been aligned with national security experts to ensure a 'whole-of-government' approach.
He emphasized that the timing of the Economic Survey’s stance was particularly concerning, given the tense relations between India and China following the 2020 Galwan Valley clashes.
Commerce Minister Piyush Goyal has since addressed the concerns, confirming that there will be no changes to the government's policy on Chinese FDI. "There is no rethinking at present to support Chinese investments in the country," Goyal said, emphasizing a cautious stance.
Goyal had clarified that the Economic Survey’s suggestions are not binding.
Since 2020, Chinese investment has required government approval, especially in sensitive sectors. Despite this, China remains India’s largest trading partner, with bilateral trade reaching $118.4 billion in 2023-24.
Bambawale urged that India proceed cautiously, especially in areas like telecommunications, where companies like Huawei and ZTE are banned. He underscored that rebuilding trust with China will be a slow process, requiring a careful, case-by-case approach to FDI, as outlined in Press Note 3.
Goyal’s position mirrors this strategy, balancing economic growth with national security priorities.