Continued tensions on the border (India China Standoff) and the measures adopted by the government to check investment by Chinese companies and funds have significantly affected the investment from China in India in the last one year. is. Data from Venture Intelligence, which monitors the financial, transactions and valuations of private companies in India, reported that private equity and venture capital funding from companies based in China and Hong Kong (Hong Kong) compared to $ 350 million in 2019 Fell to 150 crore billion in 2020.
According to Indian Express, however, total private equity and venture capital (PE-VC) investment in Indian companies increased to $ 396 million in 2020, from $ 364 million in the previous year. In addition, foreign direct investment (FDI) data also shows a slowdown in investment from China in the six-month period ended September 2020.
FDI from China amounted to $ 55 million during April-September 2020, the lowest in any three-nation period in the past three years. In the six months before September 2019 to March 2020, FDI was marginally higher at $ 6.3 million.
The largest increase in FDI from China in the last three years was seen in a six-month period between October 2017 and March 2018, when it increased by $ 247 million. The gross FDI from China from April 2000 to September 2020 is $ 243 million.
Apart from this, FDI flow from Hong Kong has also slowed down. The sector, which was the 12th largest source of FDI in India as of September 2018, slipped to 14th by the end of September 2020.
The Indian government changed the FDI rules for Chinese investors in April last year, which is a concern not only among Chinese investors but also among businesses. The growth of Chinese companies doing business in India is slowing in the country.
The head of a Chinese automobile company in India told Indian Express that their plans in India have been put to a break due to the ongoing tension on the border. This official said that sponsors are now very cautious about their plans for India.
At the same time, Indian start-ups have also pointed to finding ways other than Chinese investors, who have traditionally been major investors in India’s Internet economy. The search for such options has been increasing since the banning of several Chinese mobile apps and links by the special rope government.