The Covid-19 pandemic has no doubt entailed a deep and disturbing economic impact on global economy and it's now increasingly becoming clear that it will be difficult for any affected nation to escape the aftershocks. Signs of a heavy toll on the Indian economy are apparent and with such a scenario when most business entities are struggling to keep themselves afloat, a predatory China has added to worries. Taking advantage of the current financial vulnerability of many Indian companies, China is out to acquire stakes in them through the FDI route that has raised a hue and cry both in business and political circles. India, reading the Chinese game-plan reacted sharply and to thwart any such attempts, has appropriately revised its FDI policy. This is a well-thought move and quite expectedly has earned appreciation cutting across party lines.

 

China is not only a shark when it comes to territorial encroachment, but as an emerging economic superpower, is gradually developing the habit of flexing muscles to have its presence felt all across the economies and India is very much their frontline choice. The principal contributing reason for this step is said to be People’s Bank of China’s recent enhancement of stake in HDFC Ltd. This triggered a panic wave prompting several small and medium industries, now reeling under severe pressure due to Covid-19 crisis with their valuations also diluted, to appeal the central government to act immediately to shield them from possible hostile takeovers by Chinese investors. Department for the Promotion of Industry and Internal Trade, without directly mentioning China has taken an oblique route to block their attempts by issuing a directive that said that foreign investments from seven countries that share a border with India will now require prior government approval.

It's fact that Chinese investors over last few years have silently strengthened their presence in various Indian firms and the three large ones such as Alibaba group, Tencent Holdings and Xiaomi had already acquired big stakes in Indian start-ups. Now, the current pandemic-led distressful economic scenario in India has made it easier for them to make attempts and this firewall was bound to come sooner if not later. This is also the global trend in making and several countries including even the strong economies such as Germany and Australia have already adopted similar restrictions to stop foreign investors from grabbing or enhancing control of their domestic entities.

There are conspicuous and alarming signs that Covid-19 pandemic will give way to a new global economic order where the rule of ‘survival of the richest’, akin to the rule of the jungle- ‘survival of the fittest’ will come into play.

India must remain extra alert and if necessary, should further modify its FDI norms for the sake of sustenance of the nation’s economic sovereignty.  

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Kenter Joya Riba

(Managing Editor)
      She is a graduate in Science with post graduation in Sociology from University of Pune. She has been in the media industry for nearly a decade. Before turning to print business, she has been associated with radio and television.
Email: kenterjoyaz@easternsentinel.in / editoreasternsentinel@gmail.com
Phone: 0360-2212313

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