A man walks in front of a hoarding featuring India's Prime Minister Narendra Modi displayed ahead of the upcoming BRICS Summit in New Delhi, India, September 3, 2026. REUTERS/Bhawika Chhabra
| Photo Credit:
India may link any further easing of investment rules for Chinese investors to a satisfactory resolution of at least some concerns related to the long-pending border disputes that are under active discussion by the two sides, sources said.Chinese President Xi Jinping’s proposed bilateral meeting with Prime Minister Narendra Modi this weekend, on the sidelines of the BRICS Summit in New Delhi, could prove crucial in determining the pace of economic engagement between the two countries, particularly on trade and investment, depending on the stance he adopts on the border issues, a source close to the development told businessline.“The Ministries of Home Affairs and Defence would want at least part of the border dispute to move towards satisfactory resolution before economic concessions, especially those on investments, are made. This is being clearly conveyed to the Chinese side,” a source said.8-point consensusThe 25th round of special representatives talks between National Security Advisor Ajit Doval and Chinese Foreign Minister Wang Yi in Beijing on August 25, 2026, produced an eight-point consensus to stabilise the LAC, covering military communication, revival of border trade and the Kailash-Manasarovar pilgrimage, and trans-border river data-sharing. Both sides also agreed to pursue an “early and substantial harvest”, shifting from India’s earlier insistence on a single final package to a sector-wise approach on boundary delimitation and border management.Yet China continues to reject India’s territorial claims and refers to Arunachal Pradesh as “Zangnan” and claims part of the State as its own. “India wants to ensure that the early and substantial harvest deal on the border covers its main concerns around territorial integrity,” the source said.Team to visit BeijingA high-level Indian delegation had been expected to visit Beijing ahead of Xi’s visit to take forward discussions on trade and investment issues but talks may have been pushed back as both sides wait for clarity from the leadership talks, an industry source noted.Beijing is keen for India to further ease restrictions on Chinese investments as companies across sectors, such as electronics, EVs, solar, batteries, and industrial equipment, are keen to increase their footprint in the country.Following the 2020 India-China border clashes, new rules required government approval for investments from countries sharing a land border with India, making Chinese investments subject to stringent scrutiny and effectively choking off new Chinese FDI.In March 2026, India eased the rules a bit, allowing non-controlling investments of up to 10 per cent from land-bordering countries through the automatic route, subject to sectoral caps. It also introduced a 60-day approval timeline for investments in specified sectors, including electronics, capital goods and solar cells, while retaining security scrutiny.“Beijing wants a broader reopening to Chinese investments which could happen if there is some concrete movement on the border issue,” the source said.Published on September 7, 2026
