In May 2020, India and China faced the worst ever military face-off at Galwan Valley, Hot springs, Gogra and Pangong region in Ladakh. With the loss of 20 Indian soldiers and 43 Chinese soldiers, the Galwan valley clash was the bloodiest of all.
Growing tensions between India and China not only shook the geo-political relations across the world but it also led to the build up of hostile domestic sentiment against China's arrogance. As a result, calls for #BoycottChina grew louder and louder with each passing day.
Rising anti-China public sentiment compelled government to take some policy level measures such as stricter FDI norms for countries sharing the border with India. While this may restrict Chinese investments to certain extent, it isn't enough to neutralize the influence of China in Indian market.
Recently, People's Bank of China raised its stakes in HDFC bank to more than 1% and later also invested in ICICI Bank through the FPI route. Although the government is mulling imposing restrictions on Foreign Portfolio Investment (FPI) from China, it may not yield the desired effect.
These government measures fail to address the issue of China's existing investment levels in India and steps that could reverse China's footprint in India.
In Jan 2020, PMI Electro and BYD Olectra, both Chinese companies, have won large state contracts to supply electric buses under FAME scheme of government. As per the contract, these commercial vehicle automakers will supply 1,350 electric buses across different cities.
Chinese firms such as Alibaba group, Tencent, Steadview capital and Didi Chuxing dominate the Indian startup space. For example, 18 of the 30 Indian unicorns have witnessed investment inflow of US$ 3,500 million from Chinese firms.
Companies like Bigbasket, Zomato, Delhivery, Byju's, Flipkart, Make my trip, PayTm, Policy Bazaar, Swiggy etc. have already received Chinese investments.
Absence of local venture capital firms in the Indian start up space has resulted in domination of Chinese firms. Despite Indo-China face-off in Ladakh and consequent refusal of China to restore status, the government doesn't seem to have a concrete plan to hurt China or its economic interests in India.
Recently, the BCCI went ahead with the telecast of IPL at UAE and in a complete disregard to popular domestic sentiment, the richest cricket body chose Dream11 (another Chinese company) as its sponsor.
Few symbolic steps don't change the harsh reality of Chinese presence in Indian markets. Moreover, government steps and policy measures lack vision to counter Chinese investment blitzkrieg in the country. The disconnect between public sentiment and government response to China's aggression is visible.
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