FDI Policy of India amended to secure Indian Business Houses

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There has been a major up rise in Chinese Investments all throughout the world. During these troubling times, the only country to actually stabilize and not to mention make sizeable investments is China, the first country to report the Corona Virus Outbreak

In light of this development, India amended its foreign direct investment policy to require all neighboring nations to seek approval from New Delhi for any future deals. This is done so as to avoid hostile takeovers at a time when there’s quite the cash crunch. This also applies to any transfer of ownership of any existing or future foreign direct investment in an entity in India, directly or indirectly.

Chinese giants Alibaba and Tencent are some of the biggest investors in Indian startups. Many additional firms and venture funds in China have shown great interest in India. Some of India’s largest startups like Paytm, Flipkart, ShareChat, Zomato etc. are backed by Chinese VCs. HDFC, India’s biggest bank, said that Bank of China had raised its stake by over 1%.

This comes at a time when investments are quite hard to come by, and major investors have warned local businesses that raising fresh capital is much harder than before. So businesses should do their best to optimally utilize their existing resources to avoid major issues. Data from research firm Tracxn showed that Indian startups have already started facing pressure in acquiring new funds.

India ordered a nationwide lockdown, which has been extended thrice now. This has been done so as to avoid a major outbreak that could choke health services. So far, the lockdowns have shown a positive impact on containing the outbreak but not so much for the economy. India and the entire world for that matter, is expecting a strong comeback once the virus comes to a halt, as has been witnessed in the past.

Businesses and the economy in general are expecting major relief funds so as to ease the tension arising out of this major disruption. Many countries including India have come out with relief packages but investors are still moving cautiously, waiting for a complete recovery from the virus.

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