China has expressed dissatisfaction over changes made to India's investment rules to protect domestic companies from foreign takeovers.
The Chinese embassy in New Delhi said on Monday said the additional barriers violate World Trade Organisation principles of non-discrimination, and go against the general trend of liberalization and facilitation of trade and investment.
"We hope India would revise relevant discriminatory practices, treat investments from different countries equally, and foster an open, fair and equitable business environment," Chinese embassy spokesperson Ji Rong said.
China emphasised that the changes made by the Indian side do not conform to the consensus of G20 leaders and trade ministers to realize a free, fair, non-discriminatory trade and investment environment.
On April 18, India’s Department for Promotion of Industry and Internal Trade (DPIIT) revised its foreign investment policy, making it much more difficult for companies from countries sharing land border with India, including China, to invest in the country.
"An entity of a country, which shares land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route," the notification issued by India's DPIIT reads.
As of December 2019, China’s cumulative investment in India has exceeded $8 billion, far more than the total investments of India’s other neighbours.
In recent years, Chinese companies have made massive investment in Indian companies operating in businesses such as telecoms, electrics, infrastructure and automobile manufacturing.
According to Gateway House research, Chinese tech investors have invested an estimated $4 billion in Indian start-ups alone.
Germany and Italy tightened their foreign investment laws on 8 April while Spain and Australia also made changes to protect their companies from opportunistic takeovers. Last week, the International Monetary Fund forecast a sharp global downturn.