Indian Finance Minister Nirmala Sitharaman speaks to the Economic Club of New York in New York City, U.S., October 21, 2024. REUTERS
NEW DELHI, Oct 23 (Reuters) – India will retain curbs on investment from nations with which it shares a land border, the finance minister said days after the South Asian country struck a pact with China on patrolling their disputed Himalayan frontier.
The deal paves the way to end a four-year military stand-off and improve political and business ties between the Asian giants strained since a deadly border clash in 2020 that slowed exchanges of capital, technology and talent.
“I cannot blindly receive foreign direct investment (FDI) because I want money for investment, forgetful or unmindful of where it is coming from,” Nirmala Sitharaman told a gathering at the Wharton business school in the United States on Tuesday.
The dispute led to stagnation in ties between the world’s two most populous countries at a time of exploding demand for electric vehicles, semiconductors and artificial intelligence, key growth areas offering opportunities for co-operation.
In 2020, India stepped up vetting and security clearances in its scrutiny of investments from companies based in neighbouring countries but did not specifically mention any nations.
The step, widely seen as aimed at staving off takeovers and investments by Chinese firms, effectively turned away billions of dollars from the likes of carmakers BYD and Great Wall Motor, while red tape ensnarled Indian firms with Chinese stakeholders.
However, Indian imports of goods from China have surged 56% since the 2020 border clash, nearly doubling New Delhi’s trade deficit with Beijing to $85 billion.
China remains India’s biggest source of goods and was its largest supplier of industrial products last year.
Reporting by Nikunj Ohri and Shivangi Acharya; Editing by Clarence Fernandez
