The rules would naturally apply to Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan as well, but given the limited amount of FDI inflows from those nations

India's new FDI rules to avoid hostile takeovers during pandemic

Everyone loves a bargain. I’m not talking about the Diwali sales, or the insane discounts online. Sometimes it happens on a much larger scale, involving countries and corporations, where the stakes are much higher.&nbsp;

The government recently announced stringent changes to the rules governing FDI in Indian companies, making government approval compulsory in case of investments from our neighbours (importantly, China). We are not the only ones worried.&nbsp;

The world has always been wary of Chinese money flowing into strategic sectors. But now the fear is palpable. The pandemic has unleashed an economic crisis. Stock markets across the globe have crashed, losing almost 35 per cent, and wiping off trillions of dollars. Companies, big and small, are struggling to cope with the COVID 19 crisis. The future of millions of business is uncertain. Valuations have dropped, and cash-rich opportunistic investors, are on the prowl looking for ‘deals’.&nbsp;

There is growing unease about predatory investments, and hostile takeovers of domestic companies by foreign agencies at a vulnerable time like this. Governments are clamping down - Australia, Germany, Spain, America, Italy and now India, are all introducing stricter rules to defend their domestic industry.&nbsp;

There was a time when concerns around China were limited to ‘key technology’ areas or ‘sensitive infrastructure’. But not anymore. Even small and medium-sized enterprises which are strong in their niche segments can be attractive acquisition targets.

China’s overseas investment policy has traditionally been politically driven, with nationalistic objectives - eg. ensuring the supply of natural resources, creating world-class companies through acquisitions, securing strategic assets in technology and national priority industries and so on. We’ve seen the row over Huawei, and numerous other examples dotting Europe and America, as well as closer home, in India.

It is a politically polarising issue. China has deep pockets, the state and its subsidiaries have lent about $1.5 trillion dollars in direct loans and trade credits to over 150 countries. 18 of the 30 unicorns in India are funded by the Chinese.&nbsp;

There are lessons from the past as well. Policymakers across continents are conscious of Chinese state-owned companies buying dozens of assets after the 2008 financial crisis, and also in Europe (Greece and Portugal) when their economies were hit by the European debt crisis. Most are afraid of their local economies being exploited again at an unprecedented time like this.&nbsp;

The Chinese origins of the pandemic make things even more difficult. It has led to a rise in anti-china sentiment, making a compelling narrative against the Asian superpower. It is fuelling public outrage and therefore also inviting political intervention.

Rules are being changed across the world. Calls for protectionism and self-reliance and growing stronger. Globalisation, the buzzword for the past twenty years or more, has started to unravel. There is no pretence anymore of higher moral principles or adherence to international standards of acceptable behaviour. 
 
<a href="https://www.wionews.com/opinions-blogs/explained-why-chinese-firms-are-exploring-investment-opportunities-in-india-292449">Also read: Why Chinese firms are exploring investment opportunities in India</a>

Globalisation was built on trust, by creating bonds of mutual dependency. But we are seeing a resurgence of economic nationalism. Solidarity is giving way to self-interest.&nbsp;

Countries are moving away from multilateralism and putting themselves first. They are fighting to protect their own people and their own economies. The government are announcing stimulus packages and measures to save jobs and livelihoods. They are now also stepping up to change the rules of the game, and play watch guards to industry.&nbsp;

The mood at present is grim and suspicious. The months ahead are going to be volatile and dynamic. There will be economic and political consequences of the decisions taken today. We seem to be moving inwards, but the fact is that we are an interdependent world. Trust and transparency is the key to building a stable future. But how is the question.&nbsp;

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) 
&nbsp;

Everyone loves a bargain. I’m not talking about the Diwali sales, or the insane discounts online. Sometimes it happens on a much larger scale, involving countries and corporations, where the stakes are much higher.

Everyone loves a bargain. I’m not talking about the Diwali sales, or the insane discounts online. Sometimes it happens on a much larger scale, involving countries and corporations, where the stakes are much higher. The government recently announced stringent changes to the rules governing FDI in Indian companies, making government approval compulsory in case of investments from our neighbours (importantly, China). We are not the only ones worried. The world has always been wary of Chinese money flowing into strategic sectors. But now the fear is palpable. The pandemic has unleashed an economic crisis. Stock markets across the globe have crashed, losing almost 35 per cent, and wiping off trillions of dollars. Companies, big and small, are struggling to cope with the COVID 19 crisis. The future of millions of business is uncertain. Valuations have dropped, and cash-rich opportunistic investors, are on the prowl looking for ‘deals’. There is growing unease about predatory investments, and hostile takeovers of domestic companies by foreign agencies at a vulnerable time like this. Governments are clamping down - Australia, Germany, Spain, America, Italy and now India, are all introducing stricter rules to defend their domestic industry. There was a time when concerns around China were limited to ‘key technology’ areas or ‘sensitive infrastructure’. But not anymore. Even small and medium-sized enterprises which are strong in their niche segments can be attractive acquisition targets. China’s overseas investment policy has traditionally been politically driven, with nationalistic objectives - eg. ensuring the supply of natural resources, creating world-class companies through acquisitions, securing strategic assets in technology and national priority industries and so on. We’ve seen the row over Huawei, and numerous other examples dotting Europe and America, as well as closer home, in India. It is a politically polarising issue. China has deep pockets, the state and its subsidiaries have lent about $1.5 trillion dollars in direct loans and trade credits to over 150 countries. 18 of the 30 unicorns in India are funded by the Chinese. There are lessons from the past as well. Policymakers across continents are conscious of Chinese state-owned companies buying dozens of assets after the 2008 financial crisis, and also in Europe (Greece and Portugal) when their economies were hit by the European debt crisis. Most are afraid of their local economies being exploited again at an unprecedented time like this. The Chinese origins of the pandemic make things even more difficult. It has led to a rise in anti-china sentiment, making a compelling narrative against the Asian superpower. It is fuelling public outrage and therefore also inviting political intervention. Rules are being changed across the world. Calls for protectionism and self-reliance and growing stronger. Globalisation, the buzzword for the past twenty years or more, has started to unravel. There is no pretence anymore of higher moral principles or adherence to international standards of acceptable behaviour. Also read: Why Chinese firms are exploring investment opportunities in India Globalisation was built on trust, by creating bonds of mutual dependency. But we are seeing a resurgence of economic nationalism. Solidarity is giving way to self-interest. Countries are moving away from multilateralism and putting themselves first. They are fighting to protect their own people and their own economies. The government are announcing stimulus packages and measures to save jobs and livelihoods. They are now also stepping up to change the rules of the game, and play watch guards to industry. The mood at present is grim and suspicious. The months ahead are going to be volatile and dynamic. There will be economic and political consequences of the decisions taken today. We seem to be moving inwards, but the fact is that we are an interdependent world. Trust and transparency is the key to building a stable future. But how is the question. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Firewall for China: Calls for self-reliance grow stronger

India has emerged as the fifth most attractive market for investments and the optimism over global economic growth is at a record level, a survey of CEOs by global consultancy PwC said today.

The findings come on a day when the rich and powerful are meeting here for the World Economic Forum&#39;s (WEF) annual summit starting today.

&quot;The US remains the top spot for global investment, while India moves into the top 5,&quot; PwC&#39;s 21st CEO Survey said, adding that there is surprising faith and optimism among chief executives in the economic and business environment worldwide, at least over the next 12 months.

Around 46 per cent of global CEOs consider the US as one of the three most important countries for growth, followed by China (33 per cent) and Germany (20 per cent) at second and third places, respectively. At the fourth spot is the UK (15 per cent).

&quot;India (9 per cent) bumps Japan (8 per cent) as the fifth most attractive market in 2018,&quot; it noted.

PwC India Chairman Shyamal Mukherjee said backed by definitive structural reforms, the India story has been looking better in the past one year.

&quot;Most of our clients are optimistic about their growth. The government has made efforts to address concerns around areas like infrastructure, manufacturing and skilling, although newer threats like cybersecurity and climate change are beginning to play on the minds of our clients,&quot; he noted.

As per the survey, 54 per cent of the CEOs plan to increase their headcount this year while only 18 per cent expect to reduce their staff.

The sectors having the highest demand for new recruits are health care (71 per cent), technology (70 per cent), business services (67 per cent), communications (60 per cent), hospitality and leisure (59 per cent).

Notwithstanding the optimism in the global economy, 40 per cent of CEOs are &#39;extremely concerned&#39; about geopolitical uncertainty and cyber threats while 41 per cent feel so about terrorism.

Other factors for concerns are availability of key skills (38 per cent) and populism (35 per cent).

&quot;These threats outpace familiar concerns about business growth prospects such as exchange rate volatility (29 per cent) and changing consumer behaviour (26 per cent),&quot; the survey said.

Further, terrorism is seen as among the top ten threats to growth whereas only 20 per cent felt so in 2017.

&quot;The threat of over-regulation remains the top concern for CEOs (42 per cent extremely concerned), and over a third (36 per cent) remain concerned about an increasing tax burden,&quot; it added.

PwC conducted 1,293 interviews with CEOs spread across 85 countries between August and November 2017. Besides, the sample is weighted by national GDP to ensure that CEOs&#39; views are fairly represented across all major countries.

As many as 40 per cent of the companies had revenues of at least USD 1 billion and 35 per cent of firms&#39; revenues ranged between USD 100 million and USD 1 billion. Around 20 per cent of the companies had revenues of up to USD 100 million while 56 per cent of the entities were privately owned.&nbsp;

'The US remains the top spot for global investment, while India moves into the top 5,' PwC's 21st CEO Survey said, adding that there is surprising faith and optimism among chief executives in the economic and business environment worldwide, at least over the next 12 months

India has emerged as the fifth most attractive market for investments and the optimism over global economic growth is at a record level, a survey of CEOs by global consultancy PwC said today. The findings come on a day when the rich and powerful are meeting here for the World Economic Forum's (WEF) annual summit starting today. "The US remains the top spot for global investment, while India moves into the top 5," PwC's 21st CEO Survey said, adding that there is surprising faith and optimism among chief executives in the economic and business environment worldwide, at least over the next 12 months. Around 46 per cent of global CEOs consider the US as one of the three most important countries for growth, followed by China (33 per cent) and Germany (20 per cent) at second and third places, respectively. At the fourth spot is the UK (15 per cent). "India (9 per cent) bumps Japan (8 per cent) as the fifth most attractive market in 2018," it noted. PwC India Chairman Shyamal Mukherjee said backed by definitive structural reforms, the India story has been looking better in the past one year. "Most of our clients are optimistic about their growth. The government has made efforts to address concerns around areas like infrastructure, manufacturing and skilling, although newer threats like cybersecurity and climate change are beginning to play on the minds of our clients," he noted. As per the survey, 54 per cent of the CEOs plan to increase their headcount this year while only 18 per cent expect to reduce their staff. The sectors having the highest demand for new recruits are health care (71 per cent), technology (70 per cent), business services (67 per cent), communications (60 per cent), hospitality and leisure (59 per cent). Notwithstanding the optimism in the global economy, 40 per cent of CEOs are 'extremely concerned' about geopolitical uncertainty and cyber threats while 41 per cent feel so about terrorism. Other factors for concerns are availability of key skills (38 per cent) and populism (35 per cent). "These threats outpace familiar concerns about business growth prospects such as exchange rate volatility (29 per cent) and changing consumer behaviour (26 per cent)," the survey said. Further, terrorism is seen as among the top ten threats to growth whereas only 20 per cent felt so in 2017. "The threat of over-regulation remains the top concern for CEOs (42 per cent extremely concerned), and over a third (36 per cent) remain concerned about an increasing tax burden," it added. PwC conducted 1,293 interviews with CEOs spread across 85 countries between August and November 2017. Besides, the sample is weighted by national GDP to ensure that CEOs' views are fairly represented across all major countries. As many as 40 per cent of the companies had revenues of at least USD 1 billion and 35 per cent of firms' revenues ranged between USD 100 million and USD 1 billion. Around 20 per cent of the companies had revenues of up to USD 100 million while 56 per cent of the entities were privately owned.

India fifth-most attractive market for investments: PwC survey

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India's new FDI rules to avoid hostile takeovers during pandemic

Firewall for China: Calls for self-reliance grow stronger

India fifth-most attractive market for investments: PwC survey