Arvind Virmani, member of NITI Aayog, has emphasised the need for India's Foreign Direct Investment policies to remain flexible and responsive to shifting global dynamics. “FDI rules must align with evolving global realities,” he told NDTV Profit, explaining the reasoning behind discussions on easing Chinese investment regulations.
He noted that policy implementation is dynamic—tightened during conflict periods and likely to ease as situations stabilise. This flexibility, Virmani said, enables India to safeguard strategic interests while adapting to changing geopolitical conditions.
India's top policy think-tank has recently proposed a major change to the country's foreign investment rules, recommending that Chinese investors be allowed to acquire up to 24% in Indian companies without needing security clearance.
Clarifying NITI Aayog's role, he said, “NITI Aayog is a think tank; views may appear in working papers, but core policy decisions rest with the government.” He reiterated that FDI from countries sharing land borders with India, such as China, still requires government approval, particularly in strategic sectors.
He stressed that the goal isn't about complete bans or blanket approvals, but about targeted reforms that boost competitiveness and strengthen domestic supply chains.
Virmani added that India isn't alone in adopting such measures. “Other countries have imposed similar restrictions; liberalising FDI won't stop others from taking their own actions.”
On China's recent export restrictions on key resources like rare earths and specialised fertilizers, Virmani said, “Whether or not we open up, export restrictions from China would still apply,” adding that this creates circular arguments about lifting or maintaining controls on our side.
Virmani's remarks underscore India's careful approach to managing FDI—balancing economic openness with national security, while ensuring alignment with the evolving global order.
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