China may have expressed displeasure over Tibetan spiritual leader Dalai Lama's recent visit to Tawang, Arunachal Pradesh, but when it comes to investing in India, China Inc. is more than eager to put money into Asia's third-largest economy. The total equity investment inflows have surged almost fourfold in four years, revealing a heightened interest in India.
Statistics from the Indian government's department of industrial policy and promotion's (DIPP) website show that China's foreign direct investment (FDI) equity inflows into India rose to $1.61 billion between April 2000 and December 2016, or 0.50 percent of the total FDI inflows into India.
It marked a quantum jump from $313 million, or 0.15 percent, at the end of December 2013 and $453.82 million, or 0.19 percent, as of December 2014 (April 2000 to December 2014).
In terms of country-wise ranking, China has moved from 30th spot in December 2013 to 17th by December last year, reflecting the trend.
With Chinese firms such as e-commerce company Alibaba and smartphone makers Oppo, Vivo, Huawei, and Xiaomi investing in a big way, the FDI inflows are poised to rise even further.
"China will be one of India's top 10 investors shortly," Santosh Pai, partner at Gurgaon-based Link Legal India Law Services, which provides legal services to members of the China Council for the Promotion of International Trade, told IndiaSpend, a data-driven journalism portal.
Last month, Jack Ma-founded Alibaba Group committed $177 million in India's fintech company Paytm.
"There is no drop in the activity of Chinese companies evaluating India because of political relations between the two countries. Increasingly, the Indian political establishment too does not want to place any roadblocks on Chinese investment into India... but Indian companies tend to push back when there is negative news about the Sino-Indian relationship," Sridhar Venkiteswaran, CEO of Avalon Consulting in Delhi, told IndiaSpend.
From a destination viewpoint, Mauritius, Singapore and Japan are the top three investor-countries accounting for about 58 percent of the total FDI equity inflows, according to the DIPP website.
Cumulative FDI equity inflows into India for the period April 2000 to December 2016 stood at $324.35 billion.
The diplomatic row over Dalai Lama's visit to Tawang arose because China considers Arunachal Pradesh as its territory as part of the larger Tibet.
The bilateral trade between India and China is skewed towards the latter, with imports from China into India at $55.63 billion as against export of goods $8.94 for the 11-month period ended February 2017.
