New Delhi: Due to the growing reliance of Indian start-ups on Chinese funding, the government may now approve many startups and technology deals involving investors there. Of this, 10 per cent stake in the local company is to be given to Chinese investors. After receiving security clearances from the home ministry, the government may give its assent to the issue in the next few weeks.
Most Chinese investors fund Indian start-ups
In fact, among Indian start-ups, Chinese investors have the most funding. Suddenly, the ban on Chinese investments has created a funding crisis against these companies. This is why the government is preparing to approve technology deals related to start-ups with Chinese investors. If the government takes this step, many Indian start-ups struggling with cash shortages could be relieved.
More than 100 government proposals are under consideration
FDI proposals of many Chinese companies seeking investment in India are currently under consideration. As of April, about 100 applications from Chinese investors in various departments are under consideration. Most of these applications are from areas that are not considered sensitive to internal security. Not only startups, but also Chinese companies have shown interest in investing in the auto sector. Applications from two major automakers are also under consideration. The government has made it clear that the new FDI guidelines will only apply to new investment proposals and old investments will not come under its purview.