Unwarranted paranoia

The government seems determined to harass Chinese investors. First, it was the National Security Council (NSC) opposing infrastructure investments by Chinese companies because of security concerns. Now, the FIPB has put on hold Chinese firm ZTE Telecom’s plan to invest in wholesale trading in telecom equipment. The Hutchison’s Group’s plans to invest in container terminals have been put on hold for a while. The government can’t decide if the Hong Kong-based Group, one of the world’s largest operator of container terminals, is a security threat. Earlier, telecom infrastructure firm Huawei’s investments plans were held up for a long time. All this is totally unwarranted. Simply describing India as a favourable investment destination would fail to draw higher foreign investment in presence of bureaucratic impediments. The government must realise that suspicion of anything Chinese is no longer tenable. Globalisation presents unprecedented opportunities to both Indian and Chinese companies to forge mutually beneficial agreements which would fuel growth in both the countries. ONGC and CNPC’s successful joint bid for Syria’s Al Furat oil and gas fields is one such example.
With a larger number of Indian companies expanding operations in other countries to boost profits and increase marketshare, there is now a two-way relationship between Indian and foreign companies. Thus, getting paranoid about security and imposing restrictions on foreign companies eager to invest in telecom, ports and other sectors could trigger retaliatory measures on Indian companies. That would, in turn, be detrimental to their long-term growth prospects. Setting up an autonomous regulatory body, that will supervise the functioning of foreign companies in critical sectors such as telecom and ports and ensure compliance with regulations would be a better way of protecting security and sovereignty. This would also guarantee transparency and accountability in the company’s operations. NSC should be aware that any policy resistance against investment by companies of a specific country sends out wrong signals.

-- The Economic Times Editorial