SCMP columnist urges India to ease restrictions on Chinese investment
A South China Morning Post column argues that India should expand Chinese companies’ access to direct investment in order to develop industry and reduce dependence on imports from China.
The author noted that Xi Jinping and Indian Prime Minister Narendra Modi briefly spoke at the Shanghai Cooperation Organisation summit in Bishkek, Kyrgyzstan. At the time the column was published, China’s leader was expected to arrive in New Delhi for the BRICS summit with a delegation of about 400 officials.
Trade is growing, investment is falling
According to data cited in the publication, bilateral trade between China and India more than doubled from 2016 to 2025/26, rising from $71.5 billion to $151.1 billion. At the same time, Chinese investment in India fell from a peak of $705 million in 2015 to $6.5 million last year.
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In the author’s view, the growth of Indian imports from China, including capital goods, is linked to a lack of domestic alternatives. He believes such alternatives could emerge through Chinese investment in manufacturing. Following the border dispute, India restricted investment from China, although, as stated in the column, these restrictions have recently begun to ease.
Obstacles to industrial investment
The author cautions that even a complete removal of restrictions would not automatically make India an attractive destination for industrial investment. Among the structural problems, he names regulatory barriers and infrastructure shortcomings. Software and services remain the main areas for foreign direct investment in India, while the pharmaceutical industry receives about 4% of inbound investment.
As an example for India, the columnist cites China’s special economic zones and the China-Singapore Suzhou Industrial Park. He also believes that China could become India’s partner in developing green energy and high-speed rail. These are the column author’s assessments, not a report on decisions that have been adopted.
