Exterior Affairs Minister S. Jaishankar on Saturday delivered a pointed message about India’s distinctive challenges with China, stressing on the nation’s have to fastidiously navigate its relationship with the financial big.
“We’ve got a particular China drawback,” Jaishankar informed an viewers on the ET World Leaders Discussion board, including that India’s issues over Beijing was over and above the world’s drawback with China.
The minister emphasised the fragile steadiness between financial concerns and nationwide safety, remarking, “There’s a skinny line between economics and nationwide safety usually.”
Jaishankar additionally emphasised the necessity for companies to acknowledge their social obligations inside this context. Whereas he’s supportive of funding and development, Jaishankar cautioned in opposition to unchecked overseas direct investments (FDIs), notably these from China.
“I’m pro-investment, pro-growth, however someplace there needs to be a steadiness,” he mentioned.
Jaishankar’s stance displays India’s broader method to managing overseas investments, the place the federal government has more and more taken a cautious stance on Chinese language investments. The scrutiny of those investments has been tightened lately, notably following the border tensions between the 2 international locations. Jaishankar mentioned whereas the free stream of FDIs is vital for financial development, it shouldn’t come at the price of home industries, notably the micro, small, and medium enterprises (MSMEs) which can be important to India’s financial system.
Arvind Panagariya, economist and Chairman of India’s sixteenth Finance Fee, had in an ET report urged a extra nuanced method to Chinese language investments. Panagariya argued that past investments labeled as safety dangers, permitting Chinese language investments might truly present India with leverage over China. “Do not forget that we additionally purchase leverage in opposition to China when a sizeable funding by that nation is on our soil,” he acknowledged. This attitude means that financial engagement, even with a strategic competitor like China, can be utilized to India’s benefit.
Panagariya additionally touched on the broader debate round tariffs and protectionism, difficult the traditional view that these measures are inherently detrimental to overseas funding. He famous that “tariff leaping FDIs,” the place companies make investments domestically to avoid tariffs, can truly enhance native manufacturing and funding.
