India Bats for Greater Chinese Investment in its Startups

The growth is only starting in the Indian startup ecosystem is what is believed by flocks of investors queuing up to enter India.

Considering the country's vast expanse and opportunity that lies helped by its massive population, China is no behind.

China ranks among the fastest-growing sources of foreign direct investment in India. As of April 2018, China had pumped $8 billion into India as investments, its highest so far.

In a call for more investments, the CEO of India's policy think tank Niti Aayog Amitabh Kant said there is a need for greater Chinese investment.

Speaking at the Chindia TMT Dialogue 2018, Kant said China remains the 17th largest investor in India and should become the first.

"Instead of exporting, we would like Chinese companies to invest in India. Close to $3.7 billion have been invested in India by China in the last 3 years and about 15 percent of investment in Indian startups is from China and we would like it to increase, Kant said at the conference which was attended by up Chinese and Indian investors and entrepreneurs.

Kant outlined that India has over 100 Chinese companies but the number still should increase.

Finance, consumer internet, healthcare, food & beverage, ed-tech and software as a service (SaaS) are the top areas of investment for Chinese companies in India.

"India has the world's second best start-up ecosystem and we are nearly 4,200 tech start-ups and the number should reach 12,000 by 2020. We need a lot of scale up funding. We have tried to develop an ecosystem that is conducive to growth of start-ups, and our start-up schemes have promoted innovation," Kant said.

Keeping in view that the Indian market is very similar to China in terms of scale and complexity, Kant said China's investment in 25 startups of India should increase to more companies.

Continued Interest

Back in May this year, China's State-run bank The Industrial and Commercial Bank of China launched the country's first India-dedicated publicly offered investment fund and said the Indian market offers the best opportunity for Chinese investors due to the prospects of double-digit growth.

India's stock market offering double-digit growth post correction in the first quarter of the year has been luring more Chinese investors.

A report in Chinese daily Global Times Recent said research indicates that the Indian market has gradually become one of the best-performing markets in the world due to ongoing reforms, macroeconomic improvement and enhanced profitability, it said.

For international investors besides China, India is expected to become a lucrative market as manufacturing and better trading opportunities would be easier to clinch from China in light of the growing tension amid US and China in the ongoing trade war.

An April report by Indian news agency Press Trust of India quoted Chinese Ministry of Spokesperson Gao Feng said India has become an important market for infrastructure cooperation among Chinese companies and a major investment destination.

Kant said he believed given the recent success of investments, foreign direct investment from China could potentially grow by 4-5 times in the next five years and Chinese companies could very soon become one of India's top foreign direct investors.