Chinese investors flummoxed by India's new foreign investment rules

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Chinese firms like Great Wall and SAIC’s unit MG Motor worry about implications of tougher India rules on foreign investment. Indian craft beer maker Bira’s bridge funding round with Chinese investors could also be delayed by AdityaKalra AditiShahsays

NEW DELHI - India’s plan to screen foreign direct investments from neighbouring countries has Chinese firms concerned that such scrutiny will affect their projects and delay deals in one of Asia’s most lucrative investment markets.

Chinese firms existing and planned investments in India stand at more than $26 billion, research group Brookings said in March, with the world’s second-most populous nation emerging as a key market for everything from automobiles to digital tech. “Every Chinese investor is worried, any government approval could take months,” said Kakkar, who advises several foreign companies and investors.

“Sentiment wise it’s not been taken well but it will not change the investment plans for now,” said one of the sources who works closely with Chinese automakers in India.Indian craft beer maker Bira’s roughly $50 million of bridge financing round that involved Chinese investors could be delayed due to the new rules, said an industry source with direct knowledge. Bira did not respond to a request for comment.

 

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