India’s decision to maintain restrictions on Chinese investments is not just a matter of economic policy but a strategic imperative shaped by national security concerns and geopolitical realities. Chief Economic Adviser V. Anantha Nageswaran’s remarks reinforce that any shift in this stance will not be immediate, and for good reason. The 2020 Galwan Valley clashes marked a turning point in India-China relations, leading to heightened scrutiny of Chinese investments in India.

The government’s policy shift was not a knee-jerk reaction but a recalibration of economic engagement with China in light of national security considerations. Since then, India has systematically tightened its foreign direct investment (FDI) norms, making prior government approval mandatory for investments from countries sharing a land border with India.

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The move primarily targeted China, which had been rapidly expanding its footprint in Indian start-ups,........

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