Norms on investments from China can be eased in calibrated way: Goyal

Piyush Goyal says China-origin FDI is not banned and approvals will be sped up, as India considers a calibrated relaxation of Press Note 3 norms while advancing a broad FTA agenda

India may adopt a “calibrated” and a “step-by-step” approach to easing norms on investments originating from China, Union Commerce and Industry Minister Piyush Goyal said on Tuesday. He was in a conversation with A K Bhattacharya on Day 1 of Business Standard’s two-day annual event, Manthan 2026.

 

The minister said foreign direct investment (FDI) from China was certainly not “banned”, but it goes through an approval process. “The government’s approach at the moment is to accelerate the approval process.”

 

“We will see what needs to be done in consultation with industry. It may be a calibrated response. It may be ‘step-by-step’. Our immediate effort is to make it easier for people to engage with technology and help expand our value-chain engagement,” Goyal said. 

 

Under the current FDI regulations, prior government approval is mandatory for investment proposals originating from countries sharing a land border with India — China, Bhutan, Nepal, Bangladesh, Pakistan, Afghanistan, Myanmar — and for cases where the investor is from one of these countries.

 

Known as the “Press Note 3”, India’s position was revised in April 2020 for “curbing opportunistic takeovers/acquisitions” of domestic firms, considering their financial stress due to the Covid-19 pandemic. The move, however, was mainly meant to restrict investments from China amid growing tensions at the border.

 

“Ours is a listening government. We are always open to new ideas and to adapting with evolving times. We are in dialogue with industry to understand the difficulties it faces and how we can make things easier. Also, in cases where our relationships with neighbouring countries have improved, we are keeping an open mind about how we can attract better technology and more investments, from China too. We are in dialogue, and it will be an evolvingsituation. We are open to newer ideas,” the minister said. 

 

Free-trade agreements

 

While finalising the free-trade agreements (FTAs) under the current administration, the government has ensured that the interests of farmers, fishermen, micro, small and medium enterprises (MSMEs) and startups are protected, the minister said. Since 2021, India has signed and finalised FTAs with Mauritius, the United Arab Emirates (UAE), Australia, the European Free Trade Association (Efta), the United Kingdom (UK), Oman, New Zealand, the European Union (EU) and the United States (US). “I can assure you that there will be only win-win outcomes from all FTAs we have done. Every trade deal is in India’s interests and protects our defensive interests… We ensure that we don’t compromise at all on anything that is not good for India, and yet open up opportunities for our business, industry, youth, women entrepreneurs, startups, MSMEs, fishermen, and farmers,” Goyal said.

 

India has doubled its trade with Australia and the UAE since the implementation of the deals. Many of the FTAs are in the process of coming into effect. Efta became effective on October 1. “For the UK, we are expecting (the implementation) sometime in April. For Oman in April, and for New Zealand later this year. For the EU FTA, the processes will need to be completed by the end of this calendar year, so that it comes into effect in the first quarter of next year,” he said.

 

The minister also said that it had been decided India and the six-member Gulf Cooperation Council (GCC) nations would launch FTA negotiations with the aim of concluding it in about a year's time.

 

The minister, who has also held talks with his Chilean counterpart, said, “we will hopefully conclude an FTA soon with Chile, and the critical element is critical minerals”.

 

Quality control orders

 

Goyal further said that over the last few years quality control orders (QCOs) had largely been introduced to promote quality and safeguard consumer interests. He added that the government’s intention was not to stop imports but to ensure consumers got superior-quality products.

 

Goyal added that the Bureau of Indian Standards (BIS) had been developing voluntary standards for many years. The intent was that more people should move towards those standards and produce high-quality goods and services.

 

“Sadly, thanks to some of the steps taken by the previous government in terms of reducing our import duties significantly in the 2007-08 to 2013-14 period, we were left with a huge influx of Chinese goods or substandard goods coming into India at very low prices. In fact, our trade deficit with China grew by over 2,500 per cent between 2004 and 2014,” he said.

 

“Once you get used to low-quality but low-price goods, it's very difficult to reel people away. We kept raising import duties, and they kept lowering prices and dumping those goods,” the minister said.