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Will China drive the 'Make in India' initiative?
Thu, 26 May Pre-Open

Last year, investments in India by neighbouring country China grew six folds to US$ 870 million. Now, that's a huge jump. Further, the investments made by China in 2015 were nearly two times the investments made in the last 14 years. So what has changed in 2015 that has drastically attracted huge Chinese investments?

The answer lies in the low investment restrictions, favourable tax rates and land rent policies in the country that have led to big change. Further, the government has made considerable efforts to get Chinese investments through the 'Make in India' campaign. This is one of the reasons behind the Chinese president committing US$ 1.24 billion investments in the country. To add to this, a lot of visa and security restriction have been removed now.

Recent examples of some of the huge investments envisaged by the Chinese includes property giant Dalian Wanda Group's announcement to spend US$ 10 billion in building an industrial park in North India. Construction machinery manufacturer Sany Heavy Industry Co has also announced a plan to invest US$ 1 billion in India in the next decade.

One of biggest banks in China, The Industrial Commercial Bank of China ( ICBC), has also set up a special team in its Mumbai branch to provide its Chinese clients with consultation services for mergers and acquisitions (M&As) in India.

The increased investments will help boost employment in the country. It will be beneficial to the government in the form of more taxes and higher foreign exchange reserves.

However, such improvements are expected to happen over a long period of time. Further, certain investments are in the announcement stage. Going forward, it will be interesting to see whether these investments actually materialize.

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