India ready to take on China at WTO, but won’t budge on FDI restrictions : No one can dictate to India
India is ready to take on China or anyone else at the World Trade Organization (WTO) if China lodges a complaint against the restrictions placed on Foreign Direct Investment. India will take all action to safe guard its Sovereignty and will certainly not be dictated in this matter by any other country or any international organisation.
“China can no doubt drag India to the WTO for discriminating against it in the area of investment rules. However the WTO’s dispute settlement system has been rendered dysfunctional by the US at the moment. Similarly India too will not accept any decision which affects its security and Sovereignty.
Beijing had reacted strongly to India’s decision to make it mandatory for all investments from China, and six other countries with which India shares a land border, to be routed through the government channel. The Centre has said the move is necessary to prevent hostile takeovers at a time when Covid-19 has made Indian entities vulnerable.
Since India’s FDI policy ordinarily allows foreign investments in a large number of sectors to flow in automatically, China said the additional scrutiny imposed on investments from just a handful of bordering countries violated the WTO’s principle of non-discrimination, and should be withdrawn. National security is of utmost importance and all matters pertaining to it will be decided only by Indian Government and no one else.
China may not be wrong when it says that the FDI restrictions are in violation of WTO rules as “The principle of non-discrimination in GATT (General Agreement on Tariffs and Trade) stipulates that a member shall not discriminate between like products from different trading partners. However India Can and will invoke the ‘insecurity exception clause’ to justify the restrictions as it has clearly stated that the measures are to check hostile takeovers in this exceptional Corona circumstances which may affect our national security. Also in this we will not listen to any foolish arguments from any one, no matter what their credentials are.
India is also not at all worried by WTO at the moment or later on, since the multilateral forum’s Appellate Body, its top-decision making body, is not functioning. “ the dysfunctional dispute mechanism at the WTO is of concern for India and all other members but in this particular matter, it suits us because we don’t have to worry about presently.
The Department for Promotion of Industry and Internal Trade’s decision to come up with FDI *888restrictions followed submissions by investor groups to the Finance Ministry proposing that assets such as prime land, ports and power plants should be protected from predatory-buying by China, which has managed to protect its stock markets from crashing. They had sought proper scrutiny of all purchases of /investments in Indian assets by Chinese state-owned vehicles or Chinese proxy state vehicles.
So finally a Sovereign decision has been taken which is non negotiable and only our Parliament can changed it and no one else.