India’s Finance Ministry is reportedly considering scrapping restrictions that currently prevent Chinese companies from bidding for government contracts. The move, aimed at boosting foreign investment and easing trade ties, follows recommendations from NITI Aayog and signals a potential thaw in India-China economic relations after years of tightened rules.
India’s Finance Ministry is reviewing policies that restrict Chinese firms from participating in government contracts, according to sources. These restrictions were imposed in 2020 after border tensions, requiring security clearances for investments and bids from neighboring countries. The proposed relaxation is part of a broader effort to revive foreign direct investment and strengthen India’s integration into global supply chains.
Key highlights from the announcement include
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NITI Aayog has recommended easing rules to allow Chinese firms greater access to Indian markets.
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Current regulations require clearance from the Home and External Affairs ministries for any Chinese investment or bid.
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The Finance Ministry is considering scrapping these restrictions to attract more competitive bids and reduce project delays.
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Improved diplomatic ties and trade considerations are driving the review of existing policies.
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The proposal could allow Chinese firms to acquire up to a 24 percent stake in Indian companies without prior clearance.
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Analysts note that easing restrictions may benefit infrastructure, technology, and manufacturing projects, though national security concerns remain central to the debate.
If approved, the policy shift would mark a significant change in India’s economic stance toward China, balancing strategic caution with the need for investment and growth.
Sources: Business Today, Hindustan Times, Times of India