Capturing the Growth of Chinese Investment in India

Abstract

Chinese foreign direct investment inflows in India increased from just US $1 million in 2010 to the US $173 million in 2019, while the total private equity investment was US $3,423 million in the same period. Chinese companies emerged as majority shareholders in several Indian start-ups, particularly in the technology sector. In contrast to this economic development, there has been a constant clash among the borders, noticeably in the Dokhlam and Galwan valleys with a few other minor clashes in different areas. Both nations are experiencing a booming economic alliance and shrinking political and diplomatic relations at the same time. In this background, the current article attempts to explore the key factors influencing the Chinese to invest in India. This article also attempts to analyse the nature of Chinese investment and explain why many countries look at Chinese investment with suspicion. Applying the regression model, the study finds that various policy variables played a significant role in attracting Chinese investors to India. JEL Codes: P33, F10, F50