Your attention is my motivation, and your support is the direction we are heading. Follow me and you can see my latest articles. Appreciate the changes in the international situation.
In the wake of the 2020 border clashes between China and India, India** has stepped up its scrutiny of companies and investments with Chinese backgrounds. Recently, India's Enforcement Directorate raided 19 locations, targeting Chinese companies, sparking a new round of controversy. What is the reason for India**'s surprise investigation of Chinese companies? Why is India targeting Chinese companies? This article will take a look at the ** and give an analysis from multiple perspectives.
1. Fintech and non-bank entity networks
Indian authorities say the Chinese have built a vast network of fintech and non-bank entities in India and are seeking help from local professionals. They offer short-term loans with high interest rates through mobile apps, charging borrowers exorbitant interest. The Enforcement Directorate of India considered this practice to be suspected of money laundering and hence conducted a raid.
2. Suspected illegal fund transfer
India's Enforcement Directorate has charged Xiaomi Technology India with violating the Foreign Exchange Management Act (MFA) for allegedly illegally transferring funds to foreign entities. To do this, they froze Xiaomi-related bank accounts. Similar accusations have been made against other Chinese companies, such as vivo India. The accusations have led India to take aim at Chinese companies.
3. Border disputes and political purposes
Since India is unable to bargain with China on the Sino-Indian border issue, India has targeted Chinese companies investing in India. They want to exert influence on China by taking control of these companies and use them as a card in the border dispute. The move is aimed at alleviating India's predicament on the border issue and maintaining domestic political stability.
1. Technological competition and information technology
Competition between China and India, two major economic powers, is inevitable, and the focus of competition has shifted to the fields of high-tech industries and information technology. India** has taken harsh measures against China's telecommunications companies and other manufacturing industries. They want to reduce the competitiveness of Chinese companies in these areas and compete for more market share.
2. Dependence on foreign support and the development of the manufacturing industry
India hopes to develop its own manufacturing industry and take away export-oriented industries from China with strategic support from countries such as the United States, Japan and Europe. In this way, they can act as "bellwethers" in the Global South, elevating the status and influence of the country. The crackdown on Chinese companies has become a means for India to pursue this goal.
3. The impact of uncertainty on international capital
The uncertainty caused by India's practice of imposing fines on foreign companies and frequent policy changes has not only affected the development of Chinese companies in India, but also discouraged some international capital. According to official data released by India, from 2014 to 2021, 2,783 foreign companies registered in India terminated their operations in India, accounting for one-sixth of the total number of multinational companies in India. These practices have also taken a toll on India itself.
India's frequent targeting of Chinese companies and conducting raids and crackdowns has sparked widespread controversy. Although it is the responsibility of a national law enforcement agency to ensure the legal operation of foreign-owned enterprises, the actions of the Indian authorities have evolved in a political direction. In addition to the reasons for the suppression of Chinese companies, their uncertain policies and implementation methods also affect the investment and development of international capital in India. If India** does not change its current approach, it may lead to more international companies leaving India, which will ultimately damage India's own interests. Therefore, India** should carefully consider the consequences of its actions and seek cooperation and win-win results with the international community to achieve more stable and sustainable economic development.
Follow me to get the latest and hottest information, so that you can keep up with the pace of the times and understand the latest trends! Every bit of yours, I will remember in my heart; I appreciate your words and deeds.