“I cannot blindly receive FDI because I want money for investment, forgetful or unmindful of where it is coming from,” Sitharaman said.
The minister’s statement at the Wharton business school in the US on Tuesday comes days after New Delhi and Beijing reached an agreement on border patrols.
Prime Minister Narendra Modi also had a meeting with Chinese President Xi Jinping on Wednesday on the sidelines of the BRICS summit in Russia.
“We want business, we want investment, but we also need some safeguards, because India is located in a neighbourhood which is very, very sensitive,” Sitharaman said. “So such restrictions will be in place in the national interest.”
New Delhi had, in April 2020, imposed curbs on FDI from nations with which the country shares land borders.FDI from these nations, including China, is subject to government scrutiny and doesn’t get automatic clearance. Experts have said the Galwan clash in June 2020 enraged Delhi and led to the hardening of its stance on such FDI. India blamed China for violating established pacts that had led to the border friction.The curbs slowed the Chinese investments, which started to rise after the pandemic, although it had a negligible share in India’s overall FDI inflows in the previous two decades. China still accounted for just $2.5 billion in FDI since April 2000, or just 0.36% of the cumulative inflows.The minister also said India has identified four key focus areas -infrastructure, investment, innovation and inclusiveness-in its bid to emerge as a developed nation by 2047.
FM Calls for Reforms in Bretton Woods Institutions
Separately, at a panel discussion in Washington DC on Wednesday, the minister called for reforms in Bretton Woods institutions like the World Bank and the International Monetary Fund (IMF). They “should not allow themselves to have a ‘Mission Drift'” and that IMF resources have to be made available to all countries, she said.
“We need to have a road map for concrete reform-based steps that have to be initiated. We started it during our G20 Presidency after a lot of thinking and introspection. A shift in thinking of Bretton Woods institutions to meet the needs of the next decade is absolutely necessary,” Sitharaman said, according to a post on X (formerly Twitter) by her office.
The discussion took place on the sidelines of the World Bank and IMF annual meetings and also included panellists, such as economist Larry Summers, Spain’s economy minister Carlos Cuerpo and Egypt’s planning and economic development minister Rania Al-Mashat.
Sitharaman said much before the IMF reached some of India’s neighbours in times of distress, New Delhi had given unconditional financial support to them. India has also extended credit lines at highly discounted rates to many African countries for building their institutions and critical infrastructure, she added. “We will continue to do it because we think the Global South is with us, we want to be with them and help them,” she added.