72% decline in PE / VC investments from China, Hong Kong
Mumbai, Ta. 30 December 2020, Wednesday
In the calendar year 2020, private equity / venture capital (PE / VC) investments in the country from China and Hong Kong have declined sharply by as much as 3 per cent. In the current calendar year, PE / VC investments from these two countries stood at ૯૫ 2.50 billion, compared to 2.50 billion in 2016, according to the data.
Investments in China were down 3 per cent at à«©à« 2.6 billion, while those in Hong Kong were down 9 per cent at 2.6 billion.
As many as 150 applications for investment from Chinese companies are pending after the Indian government introduced a new rule for FDI in April, government sources said. Investments are declining due to uncertainty over who will be included in the new FDI rules and beneficiary ownership. The new FDI rules are making it difficult for start-ups in the country to get investments from China and Hong Kong.
According to the new FDI rules, investments from countries bordering India have to be made through government routes.
Beneficial owners of investment in India who reside in border countries and are also its citizens are included in the new guidelines. However the definition of Beneficial Honor has not been clarified.
The last few years have seen huge investments in the technology sector here from China. In addition, Chinese investors have shown widespread interest in the financial and pharma sectors. China is a major contributor to FDI in India.
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