FDI from China welcome: Kamal Nath

As Chinese President Hu Jintao arrives in New Delhi, India made it clear on Monday that the proposed regulations on security aspects of foreign direct exchange would not be loaded against any specific country, including China.

Different options, with or without separate legislation, were being examined for enforcing national security regulations on FDI, Commerce and Industry Minister Kamal Nath said in New Delhi on Monday.

The National Security Council plans to put together a mechanism for examining the security implications of foreign investment from a host of countries.

He said for putting in place such a mechanism, the system in other countries was being examined. "We are not doing something different... many developed countries in Europe and US have such security rules in place." 

Investments from China were welcome and "this is misconception that we are proposing country-specific regulatory mechanism," Nath said. 

The minister said a free trade agreement with China was not on the cards, but "this is something worth examining".

While China is believed to be pushing for a full-fledged FTA, there is a resistance from the Indian industry and a task force is examining various options.

Earlier, Minister of State for Commerce Jairam Ramesh said at a Confederation of Indian Industry function that while security implications could not be wished away, there has to be a relaxed approach for facilitating Chinese investments.

He, however, said that actual FDI inflows from China have not kept pace with approvals.

"As against the approvals for $260 million, only $3 million has been invested by Chinese companies," Ramesh added.

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