Subrata Majumder
Burying the hatchet of a security menace, India made a voltae face towards China for economic partnership. India’s Finance Minister Nirmala Sitaraman supported Economic Adviser’s suggestion to permit Chinese investment in India. Her Chief Economic Adviser V. Ananata Nageswala said in the Economic Survey 2023-24 that New Delhi should focus on Chinese investment in India. Currently, Chinese investment is subject to several restrictions due to security concerns.
This change in policy raised eyebrows, given the fact the China menace has not mitigated. Border tensions continue to engulf the India-China tiff.
There are several reasons behind this new look towards Chinese investment as an economic partner. FDI flow in India plateaued despite the fact that it pitched the highest growth in global GDP. FDI in India dropped consecutively for 2 years. In 2022-23, it fell by 22 percent and dropped further by 3 percent in 2023-24.
India experienced sparkling growth in electronic and automobile industries, but the growth relied more on imports. China has been the biggest supplier of components and parts for the development of these industries. In other words, lest China falter to supply critical components, these industries are unlikely to spur growth.
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