The Left parties have been left in a bind following the Modi government's strong move of disallowing FDI via the automatic route for countries with which India shares a land border, particularly China. Rather than reacting directly to the move, they have instead sought to uphold their age-old umbrella position that FDI is unwanted in general, rather than taking a stand with the action against an economically expansionary Communist China, as per top sources.
Left parties such as the Communist Party of India (Marxist) have not taken a stand as yet and are unlikely to take one as they believe singling out China does not merit a reaction, sources added. Their official stand to oppose FDI in principle remains the same but they can't support the Government either for political reasons.
When Republic TV contacted a few top Left leaders, they said the party does not believe in taking a separate stand on this. "Historically we have opposed FDI in principle but we cannot into specifics. It's not a matter of China alone. The same principle should be followed by the US as well. Party may or may not take a stand during its next Polit Bureau meeting (through video conference)," they said.
Former Congress chief Rahul Gandhi, on Saturday, thanked the government for taking note of the warning he had issued regarding 'hostile takeovers by foreign interests'. Gandhi had claimed that Indian corporates have become weak, making them attractive targets for takeovers, after China increased its stake in HDFC to 1%. He added that the government must not allow foreign interests to take control of any Indian companies during the ongoing crisis.
I thank the Govt. for taking note of my warning and amending the FDI norms to make it mandatory for Govt. approval in some specific cases. https://t.co/ztehExZXNc— Rahul Gandhi (@RahulGandhi) April 18, 2020
The Central government on Saturday made its prior approval mandatory for foreign investments from countries that share a land border with India to curb "opportunistic takeovers" of domestic firms following the COVID-19 pandemic, a move that will restrict FDI from China via the automatic route. Countries that share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.
According to a press note issued by the Department for promotion of Industry and Internal Trade (DPIIT), "An entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the government route."
It said that the government has amended the FDI (foreign direct investment) policy to curb "opportunistic takeovers/acquisitions" of Indian companies on account of COVID-19 pandemic.