India’s worsening epidemic chills foreign investment

A recent surge of COVID- 19 cases in India, which media reports said could possibly get out of control, will be another major hit to the nation’s economy and could also discourage foreign investment, experts said on Thursday.

India marked a new milestone in the raging epidemic on Thursday, reporting 314,835 new daily cases, the highest one- day tally, according to a Reuters report on Thursday.

Moreover, observers cautioned that the virus is causing a larger retreat of Chinese investment from India, which may not go back anytime soon.

Chinese investment in India is rapidly contracting. Many companies are considering a reduction in the scale of their operations, Sha Jun, executive partner at the India Investment Services Center of the Yingke Law Firm, said.

According to a Forbes report on Wednesday, “despite India’s geopolitical connections with the US government, multinationals have largely chosen to relocate elsewhere,” citing “India’s hostility to foreign investment such as it is making it difficult for companies to conduct simple transactions in the country.

Sha said the unfavorable business environment and the coronavirus have accelerated the pace of Chinese investors’ retreat. “Except for the Chinese who have been rooted for a long time, most have evacuated from India. For a while, nobody will have much interest in that market.”

Sha said multinational companies are now looking at other destinations such as Vietnam, Thailand and Mexico.