Days after India amended its Foreign Direct Investment (FDI) regulations amidst the Coronavirus crisis, China slammed the move on Monday saying New Delhi is “against liberalisation”.

Amid growing concern across the world that Chinese companies are buying cheap, distressed assets hit by the COVID-19 pandemic, the Government on Saturday reviewed the extant Foreign Direct Investment (FDI) policy for curbing opportunistic takeovers/acquisitions of Indian companies.

According to a press note by the Ministry of Commerce and Industry, “An entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route”.

Reacting on the development, China claimed that India’s new rules for Foreign Direct Investment (FDI) “violate WTO principles of non-discrimination and are against free and fair trade”. It further called for a “revision of discriminatory practices”.

“The additional barriers set by Indian side for investors from specific countries violate WTO’s principle of non-discrimination, and go against the general trend of liberalization and facilitation of trade and investment. We hope India would revise relevant discriminatory practices, treat investments from different countries equally, and foster an open, fair and equitable business environment,” the Chinese Embassy said in its statement.

FDI in India is allowed under two modes – automatic (companies don’t need government approval) or via the government (companies need a go-ahead from the Centre).

Until before the new arrangement had been made in the policy, the curb on FDI was only on Pakistan and Bangladesh as a citizen of Bangladesh or an entity incorporated in Bangladesh can invest only under the Government route. Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for foreign investment.

With the amendment, an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.

This change has brought China in the ambit of ‘government permission’ before investing in any sector in the country.

The Government came out with the new rules after Congress leader Rahul Gandhi said that the massive economic slowdown has weakened many Indian corporates making them attractive targets for takeovers.

“The Government must not allow foreign interests to take control of any Indian corporate at this time of national crisis,” he said in a statement on April 12.