Latest news with #PressNote3
India.com
28-07-2025
- Business
- India.com
India Shuts Doors On Chinese Money – What Message Is Modi Sending To Beijing?
New Delhi: The handshake may have warmed, but the heart remains guarded. Even as New Delhi and Beijing slowly return to the negotiating table after years of chill, the Indian government has made no move to relax its grip on Chinese investment. Officials with direct knowledge of the matter say there is no plan to review or revoke Press Note 3, the regulatory gate that keeps Chinese money out of India's strategic sectors. Introduced in April 2020, the note was born in a moment of national anxiety (COVID 19 pandemic) before the deadly clash in Galwan. It mandates that any investment from countries sharing a land border with India must pass through layers of government scrutiny. The policy does not name China. But it does not need to. The signal is India wants trade and growth, but not at the cost of its sovereignty. Not when questions of trust still linger across the Himalayas. 'There has not even been internal discussion so far about easing Press Note 3. This is not the time for that. The security environment has not changed enough,' said an official. Finance Minister Nirmala Sitharaman has acknowledged the potential for economic engagement. Speaking at a forum, she recently said India and China should talk and share more.' But she added a caveat: 'With caution.' That word caution hangs heavy over every boardroom pitch that originates in Beijing or Shenzhen. It is not paranoia. It is memory. The Galwan Valley changed the mood in New Delhi. It made national security a defence as well as economic issue. The government does not want Indian companies to quietly pass into Chinese hands. It does not want Trojan horses built out of equity deals. Press Note 3 now functions as a firewall. It was initially drafted to prevent opportunistic takeovers during COVID-19. Today, it stands as a symbol of India's geopolitical posture. Still, India is not closing the door entirely. There is interest in joint ventures. Electronics manufacturing remains a hopeful space. But even here, the guardrails stay up. Beijing's ambitions, officials say, stretch beyond balance sheets. And until India is sure it will not get blindsided, that door will not open fully. Any decision to dilute the restrictions will carry strategic weight. It would ripple across sectors like telecom, fintech and critical infrastructure. The consequences, economic and political, would be irreversible. For now, visas may be easier. Meetings may happen. The tone may soften. But when it comes to money, especially Chinese money, India is still watching and not welcoming. The message to Beijing is show restraint, sincerity and maybe someday, the locks will click open. But not now.
India.com
28-07-2025
- Business
- India.com
'We don't need your money': India to China on investment; 'There is no plan from the Modi government to...,' says source
New Delhi: India and China's relations are going through ups and downs. Recently there has been some improvement in the relations between the two countries. It is another matter that the government is not in the mood to lift the ban on investment coming from China. Sources have given this information. According to them, there is no plan from the Modi government to review Press Note 3. Press Note 3 says that investment coming from countries sharing land border with India will have to get approval from the government in every case. What is India's response to China? This is a clear message for the Dragon. It shows that for India its security is of paramount importance. Until it is assured, it cannot take the risk of opening the doors for China. According to a source, this is still a very early stage. There has been no talk so far about relaxing Press Note 3. At present, the possibility of doing so is also low. Finance Minister Nirmala Sitharaman had indicated the need for more access and dialogue between the two countries for economic cooperation. But, at the same time, she also stressed on exercising 'caution'. In a program, she said that both the countries want to have more dialogue with each other for economic cooperation. But this has to be done carefully. When was India's FDI policy changed? In April 2020, the government changed the Foreign Direct Investment (FDI) policy. This change was made through Press Note 3 of 2020. According to this, if a company is from a country sharing land border with India or the owner of that company lives in such a country or is a citizen of that country, then it will have to invest through the government only. Even if the ownership of such a company is transferred to a company in India, government approval is necessary. What is India's message to China? There has been tension in the relations between India and China since the conflict in the Galwan Valley in 2020. Press Note 3 was initially implemented to protect companies during the pandemic. But now it is working as an important weapon of national security. The government wants to ensure that there is no threat to national interests and security even while restoring economic relations. India wants to explore opportunities for economic cooperation with China. It is very keen to increase investment especially in areas like electronics manufacturing. But it is also cautious about China's geostrategic intentions. The continuation of Press Note 3 is an attempt to maintain this balance.
Indian Express
26-07-2025
- Business
- Indian Express
India, China marking a beginning, sense of caution would have to be built in: FM Nirmala Sitharaman
India and China are beginning to move towards more access and interactions that might help the economy, even as a sense of caution would have to be built in, Finance Minister Nirmala Sitharaman said on Saturday. She also underlined that maintaining growth is India's top priority along with the need to be a dynamic player in global institutions and redefining its role in the global South, and having a friendly and attractive FDI policy to be able to get more and more investments. When asked about the thaw in Indo-China relations at the launch of the book A World in Flux: India's Economic Priorities with the recent relaxation of visa norms, Sitharaman said not just India but China has also shown interest in these interactions and one will have to 'wait and see' how far it will go. Citing the restrictions earlier enlisted in Press Note 3 that had put curbs on investments from China, which also affected some of the projects including those in the renewable energy sector, Sitharaman said there was lull during the tariff war between the US and China. But, now it has been felt by both India and China for the 'need to have more access and a lot more interactions that could possibly open some windows'. 'And that's not just from our side, even the Chinese have been approaching through the MEA. So, you had External Affairs Minister S Jaishankar go. There is something, some kind of a beginning, as to how much it will take us far; how far it will go is something we will have to wait and see. But it might help the economy; however much, a sense of caution would have to be built in,' she said. Last week, External Affairs Minister S Jaishankar travelled to China where he had underlined that 'differences should not become disputes' nor should 'competition ever become conflict' and that while India and China have made good progress in the past nine months towards the normalisation of bilateral relations, they should work to address de-escalation on the border. India had earlier put restrictions on investments from China through Press Note 3 in April 2020 to curb potential opportunistic takeovers of Indian companies during the Covid-19 pandemic by making a government approval mandatory for all investments from countries sharing a land border with India, including China. It continued to be in force in the wake of national security concerns due to border tensions after the Galwan clash. Enlisting India's priorities, Sitharaman said growth is the topmost priority. 'Growth is the topmost priority, and therefore, it will have an overlap with: do you create jobs, do you have that value addition,' she said. The Indian economy grew by 6.5 per cent in FY25, the slowest in four years as against 9.2 per cent growth in FY24. For the current financial year 2025-26, the Economic Survey has projected GDP growth at 6.3-6.8 per cent, while the RBI has lowered its growth forecast to 6.5 per cent from an earlier level of 6.7 per cent for FY26. The second objective for India would be to be relevant on the global stage, she said. 'Not just to be there in the leadership position but to be able to define how this move is going to take India forward along with the rest of the countries. We need to define the global institutions which are going to govern us for the next hundred years,' she said. Within India, Sitharaman said the government will have to focus on whether it is giving the economy the necessary support and attending to every aspiring section's aspirations, not just by giving money but by giving an overall ecosystem through which they can aspire to grow. Finding resources for meeting domestic economic aspirations within fiscal constraints is another priority for the government, she said. Another priority would be to make sure that the FDI policy is friendly and attractive to be able to get more and more investments happening in India. On the issue of trade pacts, Sitharaman said agreements are taking priority over multilateral trade even though she can't comment if it's good or bad as of now. 'On the bilateral trade front, we are moving forward and we have seen bilateral agreements being signed in the last four to five years with Australia, UAE, EFTA and the UK. Negotiations are progressing well with the United States as well as the European Union,' she said.
Time of India
26-07-2025
- Business
- Time of India
Dixon's Dragon Deal Sparks JV Current in India
Several electronics contract manufacturers in India are plotting partnerships with Chinese companies, enthused by the Centre's nod to a joint venture between Dixon Technologies and Chinese original design manufacturer (ODM) Longcheer Intelligence . Dixon, the top homegrown electronics contract manufacturer, said late Thursday that it has secured Ministry of Electronics and Information Technology (MeitY) approval to form a joint venture with Longcheer which will be 74% owned by the Indian company and 26% by the Chinese partner. Explore courses from Top Institutes in Please select course: Select a Course Category Encouraged by the development, other Indian companies such as Epack Durable, PG Electroplast, Amber Enterprises, and Karbonn Mobile are looking to proceed with plans to ink similar JVs with Chinese firms, industry executives said. For the domestic electronics industry, the Dixon approval signals a softening of the Modi government's stance on allowing Chinese firms to join the burgeoning manufacturing footprint in the country. The industry was closely following the fate of Dixon's JV proposal. Currently any application with a Chinese entity needs multi-ministry government approval under the Press Note 3 (PN3) norms. 'The industry needs 1-2 cases of Chinese joint venture approvals before forming similar partnerships with Chinese companies,' said the chief executive of a leading contract manufacturer. 'Dixon's approval will now help everyone. Chinese companies are more comfortable with joint ventures than just technology licensing.' Mobile phone manufacturer Karbonn is finalising a JV with a Chinese company for component manufacturing, on the lines of the Dixon proposal where the foreign partner will own 26%, a senior official said. Contract AC and TV manufacturer PG Electroplast managing director (operations) Vikas Gupta said the Dixon approval is a positive for the industry since the Indian electronics industry needs technology and support from Chinese companies. He said the company will now explore equity partnership with Chinese firms for the electronics component manufacturing scheme . Meanwhile, Dixon is awaiting government approvals for two other Chinese JV proposals—with HKC to manufacture display modules, and smartphone brand Vivo for assembling handsets. According to Dixon, the MeitY approval was issued under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, and the government's Press Note 3, 2020, which states that an entity of a country sharing land border with India, can invest only after receiving PN3 approval from the government. The proposal was approved on July 23, it said. ET reported in its July 21 edition that the Centre is likely to support Chinese investments in the electronics sector, only through JV agreements, after the industry's request to ease the process. The government has however pushed for technology transfers instead of only setting up assembly units. Niti Aayog has also recently proposed easing curbs on Chinese investments in India. The government's move also comes close on the heels of external affairs minister S Jaishankar's meeting with his Chinese counterpart Wang Yi in Beijing. Post the meeting, India, for the first time in five years, resumed issuing tourist visas to Chinese citizens from July 24. India had imposed the curbs following the Galwan valley clashes in mid-2020 and issued PN3 norms that require multi-department approvals for investments from businesses and entrepreneurs based in land bordering countries such as China. This forced Chinese compressor maker Highly Group and Voltas to scrap a JV agreement in which the Chinese partner was to hold 60% two years ago as the proposal did not get the government's PN 3 approval. Renewed attempts by both companies to form the JV could not materialise in the absence of clear signals from the government though the talks can be revived again, an industry official said. Indian companies have been pushing for a review of trade ties with China, particularly concerning PN3. Joint ventures with Chinese companies are crucial for the success of the recently announced Rs 22,000-crore electronics component manufacturing scheme, experts said. The government is expected to extend the July 31 deadline to apply under the scheme as potential participants race to ink JV pacts to acquire expertise in manufacturing electronics components and sub-assemblies. "We need some hand holding from the Chinese companies otherwise Indian electronic contract manufacturing cannot move up the value chain. We would now explore opportunities," said Ajay DD Singhania, CEO at appliance contract manufacturer Epack Durable. With India seeking to deepen and expand the supply chain through the electronics component manufacturing scheme, Indian companies need expertise from Chinese entities that currently make the bulk of the components supplied globally.
Economic Times
26-07-2025
- Business
- Economic Times
Dixon's JV with Chinese firm gets govt nod, other Indian companies may follow
Agencies Dixon has secured MeitY approval to form a joint venture with Longcheer which will be 74% owned by the Indian company and 26% by the Chinese partner. Kolkata | New Delhi: Several electronics contract manufacturers in India are plotting partnerships with Chinese companies, enthused by the Centre's nod to a joint venture between Dixon Technologies and Chinese original design manufacturer (ODM) Longcheer the top homegrown electronics contract manufacturer, said late Thursday that it has secured Ministry of Electronics and Information Technology (MeitY) approval to form a joint venture with Longcheer which will be 74% owned by the Indian company and 26% by the Chinese partner. Encouraged by the development, other Indian companies such as Epack Durable, PG Electroplast, Amber Enterprises, and Karbonn Mobile are looking to proceed with plans to ink similar JVs with Chinese firms, industry executives the domestic electronics industry, the Dixon approval signals a softening of the Modi government's stance on allowing Chinese firms to join the burgeoning manufacturing footprint in the country. The industry was closely following the fate of Dixon's JV proposal. More Cos to Explore Equity Partnerships Currently any application with a Chinese entity needs multi-ministry government approval under the Press Note 3 (PN3) norms. 'The industry needs 1-2 cases of Chinese joint venture approvals before forming similar partnerships with Chinese companies,' said the chief executive of a leading contract manufacturer. 'Dixon's approval will now help everyone. Chinese companies are more comfortable with joint ventures than just technology licensing.'Mobile phone manufacturer Karbonn is finalising a JV with a Chinese company for component manufacturing, on the lines of the Dixon proposal where the foreign partner will own 26%, a senior official AC and TV manufacturer PG Electroplast managing director (operations) Vikas Gupta said the Dixon approval is a positive for the industry since the Indian electronics industry needs technology and support from Chinese companies. He said the company will now explore equity partnership with Chinese firms for the electronics component manufacturing scheme. Meanwhile, Dixon is awaiting government approvals for two other Chinese JV proposals—with HKC to manufacture display modules, and smartphone brand Vivo for assembling handsets. According to Dixon, the MeitY approval was issued under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, and the government's Press Note 3, 2020, which states that an entity of a country sharing land border with India, can invest only after receiving PN3 approval from the government. The proposal was approved on July 23, it said. ET reported in its July 21 edition that the Centre is likely to support Chinese investments in the electronics sector, only through JV agreements, after the industry's request to ease the process. The government has however pushed for technology transfers instead of only setting up assembly units. Niti Aayog has also recently proposed easing curbs on Chinese investments in India. The government's move also comes close on the heels of external affairs minister S Jaishankar's meeting with his Chinese counterpart Wang Yi in Beijing. Post the meeting, India, for the first time in five years, resumed issuing tourist visas to Chinese citizens from July had imposed the curbs following the Galwan valley clashes in mid-2020 and issued PN3 norms that require multi-department approvals for investments from businesses and entrepreneurs based in land bordering countries such as forced Chinese compressor maker Highly Group and Voltas to scrap a JV agreement in which the Chinese partner was to hold 60% two years ago as the proposal did not get the government's PN 3 approval. Renewed attempts by both companies to form the JV could not materialise in the absence of clear signals from the government though the talks can be revived again, an industry official companies have been pushing for a review of trade ties with China, particularly concerning PN3. Joint ventures with Chinese companies are crucial for the success of the recently announced Rs 22,000-crore electronics component manufacturing scheme, experts said. The government is expected to extend the July 31 deadline to apply under the scheme as potential participants race to ink JV pacts to acquire expertise in manufacturing electronics components and sub-assemblies.
