Rajiv Kumar, former vice chairman of India’s NITI Aayog, advocated for increased foreign direct investment from China and emphasized India’s need to become a more investor-friendly market, drawing on his experience negotiating with Apple during its push to expand manufacturing in India.
- Apple’s India expansion included bringing Chinese vendors after government pushback.
- Kumar advocates a proactive ‘promotional state’ to welcome foreign investors.
- Calls for balancing national security with greater openness to Chinese FDI.
What happened
Rajiv Kumar, who served as the vice chairman of India’s NITI Aayog from 2017 to 2022, disclosed that talks with Apple commenced around 2018 to enable the company to expand its manufacturing footprint beyond China. During these discussions, Apple requested permission to bring in its Chinese vendors to establish operations in India. Although initially met with resistance, the government ultimately allowed it, facilitating Apple’s entry and production setup in the country.
Kumar recounted that Japan’s then-Prime Minister Shinzo Abe’s announcement of $2 billion to help Japanese companies diversify from China also influenced discussions. Standard Chartered Bank played a key role by connecting Kumar with Apple’s team, leading to detailed talks on what Apple required to operate in India. Kumar emphasized this model as an example for attracting other major foreign investors across various sectors.
Why it matters
Kumar stressed that India should shift from being a primarily regulatory state to a ‘private sector promotional state’ where investors feel welcomed and supported. This approach would involve government officials actively targeting anchor investors, addressing their concerns proactively, and assigning clear responsibility within ministries to facilitate investments. His vision includes cultivating trust in the private sector and fostering an environment where investors are invited to grow rather than regulated with suspicion.
Specifically on Chinese investment, Kumar argued that while national security remains paramount, India must reconsider its restrictive stance toward China. He noted the significant scale of outbound investment from China—estimated at $250 billion—and proposed that India could benefit by attracting a portion of these funds, creating a win-win scenario given India’s large market and China’s need for growth beyond domestic consumption.
What to watch next
Attention will focus on whether India adopts Kumar’s recommendations to proactively court foreign investors, particularly from China, by streamlining permissions and promoting open dialogue. The government’s approach to visa policies, corporate facilitation, and sectoral targeting will provide indicators of openness. The case of Great Wall Motor, a Chinese automaker that showed intent to invest but faced visa hurdles, highlights the existing barriers that may need addressing.
Additionally, India’s balancing act between national security concerns and economic openness will be closely monitored. With plans such as the BRICS summit potentially fostering greater China-India engagement, developments on Chinese FDI policy and bilateral business cooperation could signal a significant shift in India’s economic diplomacy and foreign investment strategy going forward.