India tracking impact of Chinese FDI in S Asia

Dhaka,  Wed,  26 July 2017
Published : 11 Jul 2017, 21:46:15
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India tracking impact of Chinese FDI in S Asia

NEW DELHI, July 11: In the backdrop of the tense border stand-off in Sikkim with China, the Indian government has begun its first ever in-depth assessment of Chinese investments in India's neighbouring countries.

The exercise, being conducted mainly from India's national security perspective, has been initiated by the Prime Minister's Office and the National Security Adviser, The Hindu newspaper quoted official sources.

In addition to assessing the nature and impact of Chinese FDI in Bangladesh, Bhutan, Myanmar, Nepal, Pakistan and Sri Lanka, the study will track Chinese investments in Afghanistan and Maldives too.

Informal discussions have already been held with the concerned Ministries, including the Commerce and Industry Ministry, the nodal body for foreign trade and foreign investment.

The officials said given the increasing influence of China in the Indian sub-continent and South Asia, the study will be dynamic and is, among other things, expected to look into various trends, tracking a surge, if any, in Chinese FDI in the region. For instance, Pakistan government data shows that FDI from China jumped from $256.8 million in 2014-15 to $878.8 million in 2016-17 (July-May).

The study will also analyse the impact of these Chinese investments  including those being made as part of the Belt and Road Initiative (BRI, also known as One Belt One Road or OBOR)  on India's national security, sources said requesting anonymity. India's reservations regarding the BRI/OBOR include strategic concerns on the BRI's flagship project, the $50 billion China-Pakistan Economic Corridor (CPEC), as it is expected to cover regions including Azad Kashmir.

However, the major challenge in the study will be the lack of detailed, country-wise data on overall FDI (year-wise) and Chinese FDI, in particular.

According to Biswajit Dhar, Professor at Jawaharlal Nehru University, Chinese investments in countries like Pakistan could, in turn, set the stage for Pakistan to make inroads into markets in Bangladesh, Sri Lanka and Nepal and challenge the presence of Indian firms in these markets, where India is currently the major player.

The CPEC/OBOR projects can also better link Pakistan with the Central Asian Republics (CAR) and help the country establish a footprint in those markets, Prof. Dhar said.
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