The Centre has given final shape to its new FDI policy to promote investments from China, which will have provisions to immediately cancel the contract of a company if found indulging in anti-national activities or spying.
The government also plans to set up state-of-the-art testing facilities and will insert a clause that would make it mandatory for the company to hire more Indian employees. The policy will also have provisions for post-investment monitoring.
A condition will be inserted to ensure that Chinese companies do not set up factories near the border areas or near sensitive installations.
The National Security Council Secretariat (NSCS) had invited all stakeholders to review the policy in respect of security clearance norms for Chinese FDI.
During his visit to China last week, Prime Minister Narendra Modi invited Chinese investments, especially in the fields of infrastructure, manufacturing and telecommunications, among others.
As part of the “Make In India” policy, a decision has been taken to liberalise provisions for Chinese investment.
The intelligence agencies, meanwhile, expressed their apprehensions about the presence of Chinese companies here, but the government decided to go ahead with its policy.
“It is unlikely that India will go to war with China in the next 10 years. Such kind of vague apprehensions about China need to be addressed and in order to ease business, steps are being taken to address vulnerabilities,” said a Home Ministry official. The government is also planning to set a time limit of 60 days for all the security clearances.
“It is not as if Chinese companies are not sending their products to India, it is all coming through the import route. If investments have to be promoted, then security clearances need to be eased,” said the official.
“The post-investment monitoring will ensure that national security is not compromised,” said the official.
During PM Modi’s visit, two states—Maharashtra and Gujarat—were chosen for industrial parks to be set up.
“Over the last few days, we deliberated with all the concerned agencies like IB, R&AW and tried to address their apprehensions. The government is not in a mood to stall Chinese investments,” said the official.