The whole world was thinking that America and its President Donald Trump would bring China to their knees. But this did not happen. Dragon has come to the knees, but India has done this work. Taking advantage of the tariff war, Chinese companies have been convinced to accept all the conditions for investing in India, for which Chinese companies have been reluctant for a long time. People who know the matter said that Shanghai Highly Group and Higher have come to Chinese companies, which have agreed to accept the terms and conditions of the Government of India for expansion in India.
Which includes maintaining a minority stake in the main condition joint ventures. For which Chinese companies were not ready earlier, but they have been persuaded to do so amidst the growing tariffs of America. He said that if the Chinese firms are excluded from that market, then their presence in India will be important. In 2020, after violence on the border, New Delhi had taken indifferent attitude towards Chinese investment. People with information said that one of the largest compressor maker companies in China, Shanghai Hilli has resumed talks for Manufacturing Joint Venture with Voltas of Tata Group and now agree for Minority Stake.
PLI scheme helped
Another big company Higher, which ranks third in the Indian Electronics Market in terms of sales, has agreed to sell a magicity stake in its local operation; In the media report, Rajesh Aggarwal, director of Bhagwati products, a telecom and electronics contract maker, said that the attitude of Chinese companies has completely changed, which is now very comfortable in keeping a minority stake in the Indian joint venture or forming a technical alliance.
He said that Chinese companies do not want to lose their business, because India is a big market and there is scope for export under the tariff system. The PLI scheme is also proving to be very effective. Which will make the production cost neutral compared to China. ” He was referring to the production-linked incentive scheme for electronic components, which the government has recently announced.
Higher was planning to sell the minority share of up to 26 per cent to a strategic partner as it is not able to invest money in India and expand its business, as the government is not encouraging FDI from China. But the sales process, which began last October, was delayed. Industry officials said that Higher is now interacting with several Indian companies and private equity funds to sell stake up to 51-55 foci.
Dragon status weak
According to the industry experts, China’s products in America will become very expensive due to Trump’s tariff, so Chinese companies do not want to let the growth slow down in India and they have agreed to accept all the conditions of the government. The government has indicated that it will approve joint ventures with Chinese companies, if they have a minority stake, the board is prominently Indian and provides Venture Value Edition or brings new technology required to increase local production.
Shanghai Highly is also ready for a technical allowance, under which it will transfer production lines and tech. A joint enterprise by Voltas and Shanghai Highlie, in which the Chinese company was to gain 60 per cent ownership, was canceled two years ago. According to the Rules of Press Note 3, any FDI requires the approval of the government from the unit of a country sharing border with India.
This was done by targeting China and came amid growing stress. Shanghai Highly has recently created a technical allowance to create AC compressors with PG Electroplast, under which he will share technology. There is no equity clause in the agreement. PG is setting up a capacity of 5 million units per year near Pune for Rs 350 crore.