New Delhi [India], April 19 (ANI): PHD Chamber of Commerce and Industry (PHDCCI) president DK Agarwal, on Sunday welcomed the move by the Department for Promotion of Industry and Internal Trade (DPIIT), which allows an entity of a country sharing a land border with India to invest only after receiving the government's approval.
"DPIIT has made some changes in the FDI policy, according to which the government permission has to be taken for getting FDI for all countries with which India shares its land border. This has been done so that nobody can take undue advantage of the unrealistic downfall in the valuation of our companies due to the conditions posed by the COVID-19 pandemic," Agarwal told ANI here.
He further said that this has been done to stop Chinese firms from getting an undue advantage during the crisis caused by the COVID-19.
"It has been done, as I understand, to stop China from getting undue advantage here. Recently, the People's Bank of China raised its stake to one per cent in HDFC Bank in India. Therefore, this has been done to stop such things," he added.
The president of PHDCCI further said that restrictions were already in place for FDI from Bangladesh, Pakistan, but with this move, China, Bhutan, Nepal, and Afghanistan have also come under the scope of the government's approval mechanism.
"It is a move in the right direction. It will have a good impact in the future. China is trying to invest in countries around the globe. Even some European countries like Italy, Spain, and Australia have made the government approval necessary for such foreign investments," said Agarwal.
He, however, said that India needed FDI "but not at this valuation and no country should be allowed to take benefit of the situation caused by COVID-19. Therefore, this is the right move at the right time."
He also said that the start-ups in India are likely to get affected by this move.
According to a statement issued by the DPIIT, an entity of a country that shares a land border with India can invest only after receiving government approval.
"However, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the government route," said the statement. (ANI)