The Government of India took a bold step a few days back to reduce the investments from its neighboring countries like China but these FDI (Foreign Direct Investment) guidelines were worrying for businesses receiving their major funding from Chinese companies. Government in a new report is said to be considering accelerating the investment proposals.
The new FDI rules came as a blow to several companies and investors who have been planning to invest in India. The government now is contemplating to speed up the approval processes. They plan to validate the non-sensitive sector proposals within 15 days.
As per the new FDI Guidelines, any company that is planning to have Chinese investors, will have to go through the respective nodal Ministry of India and they will have to wait up to 6 months to accept the funding. The Chinese embassy in New Delhi called this step discriminatory and contrary to the understanding of free and fair trade.
Chinese investors have played a major role in Indian startups by being their major source of funding. Companies like Alibaba, Tencent, Shunwei, Steadview Capital etc are few of the big investors in Indian startups. These fundings have helped Indian Economy flourish as well by turning startups into major contributors of economy. This is a positive step from Indian Government after the new FDI rules.