Chinese investors are ready to pump in billions of dollars in investments in India but are looking to the Indian government for a “little more” investment- friendly environment, a report in the official media here said days after President Xi Jinping’s visit to the country.
“India is a great market and under the leadership of the new Prime Minister Narendra Modi, the country is now seen as a market with better prospects for foreign investments,” said Pan Song, MD of private equity at Fosun Group, one of the largest privately owned conglomerates in China.
“(Modi) has demonstrated his success in attracting Chinese investments in his home state Gujarat, where several Chinese companies have invested,” Pan was quoted by sate-run China Daily as saying in an article.
Investors expect more investment-friendly policies opening up more sectors for foreign direct investment, he says.
Fosun Group plans to invest “anything between USD 100 million to USD 500 million in the next two to three years”, Pan said.
The article was published days after President Xi’s visit during which agreements worth about USD 20 billion were signed to set up two Chinese Industrial Parks in Gujarat and Maharastra besides modernisation of Indian railways.
USD 20 billion fell short of expectations after a Chinese diplomat spoke of likelihood of USD 100 billion investment to rival Japan’s commitment to invest USD 35 billion in India.
The article said Huawei India, which has been a major supplier of telecommunications equipment and operates in the country its largest overseas research and development centre outside China, is sitting on an investment outlay of over USD 2 billion. But problems persist.
“Even as India says that it wants to encourage manufacturing with foreign help, Huawei is still struggling to obtain a manufacturing license in India,” Sameer Rawal, director of strategy and marketing at Huawei India told the Daily.
“Concerns regarding security and suspicion continue to hinder the process,” Rawal said.
Chinese companies, on the other hand, face hurdles in India owing to perceived security and privacy threats, the daily said.
Procurement of Huawei and ZTE telecoms equipment, for instance, has been banned for government projects despite being superior to some competitors in terms of quality and pricing, it said. Protectionism is another thorny issue.
China has initiated only four dumping cases against India, whereas India has filed 147 cases against China, of which 120 have ended with import bans, it said.
Pan of Fosun says India’s procedures for application and approval of foreign investments are complicated.
Moreover, just a few sectors are open to FDI.