Nod to 3 FDI proposals from Hong Kong, none from China so far

India had cleared three investment proposals from Hong Kong last month, before the beginning of the first phase of de-escalation of the border tensions with China.

The inter-ministerial committee (IMC) set up to review Chinese foreign investments cleared proposals by two Japanese companies -- Citizen Watches Company and Nippon Paint Holdings, routed through Hong Kong -- and a third by Hong Kong-based NRIs in Hyderabad-based Netplay Sports Pvt Ltd.

“The approved proposals are not from Chinese companies. Moreover, the approvals were granted before the de-escalation process started,” said an official.


No Chinese proposal has been cleared yet.

An inter-ministerial committee with joint secretaries from various ministries and departments was set up last year to help the home secretary-headed panel examine proposals with minor investments from Hong Kong and China.

“The IMC will clear the proposals from China only on a case by case basis,” the official added.

The committee was setup after many proposals from non-Chinese origin companies were stuck for security clearances post the change in the foreign direct investment (FDI) policy that made prior government approval mandatory for FDI from countries which share a land border with India.

Investment via Hong Kong was also covered under this policy.

The changes applied to sectors which allowed investments through the “automatic” route.

Over a hundred proposals were stuck for clearances after the policy came into effect last April.

The Department for Promotion of Industry and Internal Trade had said the changes to the FDI framework were aimed at “curbing opportunistic takeovers/acquisitions of Indian companies due to the current Covid-19 pandemic”.

The move was largely aimed at curbing direct and indirect Chinese FDI owing to growing security concerns amid border conflict.