China’s FDI in India’s Non-Conventional Energy Space Shrunk in 2019-20

The investment in the sector by Chinese enterprises was around $46.61 million, while total Chinese FDI in India was $1,481.65 million


China’s foreign direct investment (FDI) in the Indian non-conventional energy segment was just 3.14% of the total Chinese FDI over the last five years, indicated minister of state for finance, Anurag Singh Thakur, in Lok Sabha.

Over the last five years, total investment in the sector by Chinese enterprises was around $46.61 million, while its total FDI in India was $1,481.65 million, according to Thakur.

FDI Inflows Non Conventional Energy

The total FDI inflow in 2019-20 was $163.77 million, and outflow was $20.63 million in 2020.

India had also received $54.02 million in FDI for the electronics sector in 2019-20.

FDI for non-conventional energy by Chinese companies dropped to $150,000 compared to $24.44 million in the previous year.

In April this year, the central government tweaked its existing FDI policy to deter opportunistic takeovers and acquisitions of Indian entities by foreigners. According to the new rules, an entity from a country sharing borders with India can invest only through the government route.

Earlier, only Bangladesh and Pakistan were under this category, which has now been expanded to all neighboring countries sharing the border with India. India shares land borders with seven neighboring countries of Pakistan, Bangladesh, China, Nepal, Myanmar, Bhutan, and Afghanistan. Now, the FDI proposals involving investments from these countries will be processed by the appropriate administrative ministry or department.

Following this, the Ministry of New and Renewable Energy (MNRE) had announced the formation of an FDI cell to process the FDI proposals.

In India, the majority of renewable expansion has been made possible with the help of FDI.

Earlier, Mercom reported that India’s renewable sector’s foreign direct investments stood at $1.27 billion (~₹96.96 billion) for the first nine months of the financial year (FY) 2019-20. The sector received $1.45 billion (~₹110.53 billion) in the entire FY 2018-19.

Debjoy Sengupta is a Senior Assistant Editor at Mercom. Debjoy brings more than two decades of experience in frontline journalism, spending most of his career working for dailies like Business Standard and The Economic Times. He has reported on a vast array of sectors, including power and renewables. A graduate in business economics, Debjoy is an amateur 3D digital artist and a photographer. More articles from Debjoy Sengupta.