{"id":162901,"date":"2022-01-18T20:39:35","date_gmt":"2022-01-18T15:09:35","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=162901"},"modified":"2022-01-18T20:39:35","modified_gmt":"2022-01-18T15:09:35","slug":"pragmatism-on-investment","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/pragmatism-on-investment\/","title":{"rendered":"Pragmatism on investment"},"content":{"rendered":"\n<p><strong>News:<\/strong> Recently, India\u2019s foreign direct investment (FDI) policy was altered through a press note. But the government is re-examining extra scrutiny on Chinese investment.<\/p>\n<p><strong>What was changed in FDI policy?<\/strong><\/p>\n<p>Investment from countries with which India shared a land border would no longer be allowed through the automatic route. They have to be cleared in advance.<\/p>\n<p>This was done to curb opportunistic or strategic takeovers by Chinese companies. <strong>However, <\/strong>there is a need for large-scale re-evaluation of the process because proposals valued at about $6 billion have been delayed by bureaucratic requirements.<\/p>\n<p><strong>What are the flaws existing with extra scrutiny on Chinese investment?<\/strong><\/p>\n<p><strong>\u00a0<\/strong><strong>First<\/strong>, an overall roadblock reduces investment because flows through the global financial center of Hong Kong were also scrutinized.<\/p>\n<p><strong>Second<\/strong>, there are also effects on the attempt to attract global supply chains to India because the supply chains are not single-owner, single-unit enterprises.<\/p>\n<p><strong>For example<\/strong>, A large mobile handset maker has a chain of supporting subcontractors. Some of these might be Chinese-owned. To make India an attractive destination for the handset maker would require the involvement of its subcontractors.<\/p>\n<p><strong>Third<\/strong>, Indian policymakers realized that economic openness should not be ignored while focusing on \u201cself-reliance\u201d. It is essential to be a location for global supply chains.<\/p>\n<p><strong>Fourth<\/strong>, India\u2019s attempts to develop mass manufacturing and key frontier sectors will be nil, if it does not understand the feature of global value chains.<\/p>\n<p><strong>What is the way forward?<\/strong><\/p>\n<p><strong>One<\/strong>, all recent tariffs or industrial policies should be evaluated.<\/p>\n<p><strong>For example,<\/strong> the production-linked incentives (PLI) scheme for semiconductors. The government has set aside a subsidy of $10 billion for a new fabrication plant. This has a strategic significance because there are bottlenecks in the semiconductor supply chain in the whole world.<\/p>\n<p>But it must not create a high-cost, protected enclave domestically.<\/p>\n<p><strong>Two<\/strong>, it is essential to balance efficiency, strategic autonomy, and the reality of trading networks, and the government should take a flexible and pragmatic approach.<\/p>\n<p>For example, A semiconductor supply chain that passes through India must be deeply integrated with the rest of the world and reflect India\u2019s comparative advantage in design.<\/p>\n<p><strong>Source<\/strong>: This post is based on the article \u201c<strong>Pragmatism on investment<\/strong>\u201d published in\u00a0<strong>Business Standard<\/strong> on\u00a0<strong>18<sup>th<\/sup> Jan 2022<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>News: Recently, India\u2019s foreign direct investment (FDI) policy was altered through a press note. But the government is re-examining extra scrutiny on Chinese investment. What was changed in FDI policy? Investment from countries with which India shared a land border would no longer be allowed through the automatic route. They have to be cleared in&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/pragmatism-on-investment\/\">Continue reading <span class=\"screen-reader-text\">Pragmatism on investment<\/span><\/a><\/p>\n","protected":false},"author":10316,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216],"class_list":["post-162901","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":1700779338,"cached_date":1704747920},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/162901","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10316"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=162901"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/162901\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=162901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=162901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=162901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}