China Says India’s New Investment Rules Violate WTO Principles

China urged India to revise new investment rules that seek to block companies from neighboring nations taking over local businesses, saying they’re in violation of principles laid down by the World Trade Organization.

The curbs seeking to cut the risk of opportunistic takeovers as the coronavirus outbreak drives down valuations of Indian companies “go against the general trend of liberalization and facilitation of trade and investment,” Ji Rong, spokeswoman of the Chinese Embassy in India, said in a statement on Monday.

India’s trade ministry spokesman didn’t immediately respond to an email seeking comment.

The new curbs will allow an existing foreign investor from any country that shares a land border with India to invest only after approval by the Indian government. Such restrictions were so far applied only to FDI from Bangladesh and Pakistan. India shares its land border with seven countries, including China.

As of December 2019, China’s cumulative investment in India’s industries including mobile phones, electrical appliances, infrastructure and automobiles exceeded $8 billion, according to the statement. Chinese enterprises actively made donations to help India fight the COVID-19 epidemic, it said.

The changes in Indian rules were made after the nation’s biggest mortgage lender Housing Development Finance Corp. said the People’s Bank of China raised its stake in the company to just over 1%, earlier this month. HDFC’s shares had plunged 25% last month amid the brutal sell-off in global markets on concerns about the spreading coronavirus pandemic.