Improved China ties welcome but not at cost of India's interests: Brahma Chellaney

Strategic affairs expert Brahma Chellaney warned that India's decision to ease China-linked FDI restrictions signals a "second U-turn" in its China policy, raising concerns about growing economic dependence despite unresolved border tensions.

India’s decision to ease foreign direct investment rules for companies linked to neighbouring countries has sparked fresh debate on the country’s China policy, with strategic affairs expert Brahma Chellaney warning that New Delhi appears to be moving towards economic accommodation with Beijing despite unresolved border tensions.

The Union Cabinet, chaired by Prime Minister Narendra Modi, cleared a revision to foreign investment rules that allows overseas investors with up to 10 per cent beneficial ownership from countries sharing a land border with India to invest through the automatic route. The policy change relaxes restrictions imposed in 2020 after tensions with China escalated along the Line of Actual Control.

Countries sharing land borders with India include China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar and Afghanistan.

Reacting to the development, Chellaney argued that India’s China policy has undergone a series of sharp shifts in recent years.

“This shift began much before Trump’s Iran war. It's okay to improve relations with China, but what is not okay is to make abrupt reversals in policy without any debate,” he said during a discussion on India Today.

According to him, the government had dramatically altered its approach to China after the 2020 military standoff in eastern Ladakh.