An inter-ministerial panel in India has recently approved several investment proposals in the electronics manufacturing sector. This approval is important because it is one of the first times Chinese companies are involved since recent border tensions and tighter checks on Chinese investments in India, according to a report by the Economic Times.
Among the key approvals is one for Luxshare. Another approved proposal is a partnership between Bhagwati Products (Micromax) and Huaqin Technology, where the Chinese company has a small share. Additionally, proposals from Taiwan-based firms that are either listed in Hong Kong or have investments tied to the region have also been approved.
“Some of these companies are based in Taiwan, with owners who either have interests in Hong Kong or are listed on the Hong Kong exchange, while a few are directly Chinese firms,” said an official who preferred not to be named.
The approvals come at a time when India’s electronics manufacturing industry is increasing pressure for the approval of China-linked investments to enhance and strengthen the country’s supply chains.
The inter-ministerial panel has conducted two rounds of meetings so far, approving seven to eight proposals across different sectors, with most of them in electronics.
Indian companies have been pushing for a review of trade relations with China, especially because of Press Note 3. In 2020, the DPIIT changed the foreign direct investment (FDI) policy. The new rule requires government approval for investments from countries that share a land border with India. This change was made after border clashes between India and China in mid-2020.
The government is now carefully allowing some Chinese investments again, but with certain precautions. This shift is based on the idea that increasing local value addition is important for India to become self-sufficient in electronics manufacturing.
David Thompson is a freelance journalist and blogger from Denver, Colorado. With a degree in English Literature and a decade of experience in writing, David covers everything from current events to lifestyle topics. His work has been featured in numerous online publications, where he brings fresh perspectives and thoughtful analysis to his readers. When not writing, David is a dedicated traveler, outdoorsman, and coffee enthusiast who enjoys discovering hidden gems in his hometown and beyond.