India said this week that all foreign direct investment from countries sharing a land border would require prior government clearance
NEW DELHI: India plans to fast track the review of some investment proposals from neigbouring countries such as China following concerns new screening rules could hit plans of companies and investors, three sources told Reuters.
To avoid opportunistic takeovers during the coronavirus outbreak, India said this week that all foreign direct investment from countries sharing a land border would require prior government clearance, meaning they can’t go through a so-called automatic route.
Advisers to Chinese firms have said they are concerned the process could take several weeks and hit deals and investment timelines. Auto firms such as SAIC’s MG Motor and Great Wall, and investors Alibaba and Tencent have placed major bets on India.
The Chinese Embassy in New Delhi has called the new screening policy discriminatory.
A senior Indian government source who is involved in policymaking told Reuters that New Delhi will try to approve any investment proposal in a non-sensitive sector within 15 days when the stake being bought is not significant.
The official declined to elaborate on which sectors would be considered sensitive and what threshold of investment would be deemed significant.
“We will try to fast track investment proposals as soon as possible. It may be faster for some (sectors) and in others we might take some time,” said the official, who did not want to be named due to the sensitivity of the discussions.
Two other sources familiar with the government’s thinking confirmed that a fast track mechanism was being considered, with possible approval timelines of seven days to four weeks.
India’s ministry of commerce and industry did not immediately respond to a request for comment.