Mumbai, India – A growing rift within India’s ruling Bharatiya Janata Party (BJP) has emerged over the issue of inviting Chinese investments, as the country strives to become Asia’s manufacturing powerhouse.
According to Alicia Garcia-Herrero, chief Asia Pacific economist at Natixis, there is an “internal battle” brewing within the party, with some members advocating for increased Chinese investments and others strongly opposing the idea.
The conflict began when India’s Chief Economic Advisor V Anantha Nageswaran proposed promoting foreign direct investments from China, but was promptly rejected by Trade Minister Piyush Goyal.
Experts believe that Chinese investments are necessary for India’s solar panel and battery manufacturing sectors, which are crucial for the country’s renewable energy goals and electric vehicle ambitions.
However, relations between India and China have been strained due to border disputes, making it challenging for India to accept Chinese investments.
India aims to attract $100 billion in foreign direct investment (FDI) annually and become a manufacturing hub, but needs Chinese investments to achieve these goals.
The sectors in focus for potential Chinese investments include solar panels, battery manufacturing, and potentially semiconductors.
The internal conflict within the BJP highlights the challenges India faces in balancing its economic goals with geopolitical tensions.