A Comparative Analysis of the Chinese and Indian FDI Regimes

This article provides a comparative legal study of certain salient aspects of the Chinese and Indian Foreign Direct Investment (FDI) regimes, keeping in mind the differences in the constitutions and legal systems of both countries. India is presently perceived by foreign investors as having an uncertain regulatory environment as far as its FDI policy. However, implementation is a concern, though the government seeks to attract huge foreign investment, which is also viewed as a panacea to the mounting current account deficit problem. On the other hand, China has shown a consistent surge in FDI inflows in spite of its economic slowdown and marked legal reforms in recent years. Are there takeaway lessons for India from the merits (and demerits) of the Chinese Foreign Investment Regime? Yes, India can certainly learn from China’s “national investment policymaking,” though the benefits derived from this comparative study can be mutual. This article also objectively critiques relevant existing literature, revealing problems present in both FDI Regimes.