India Restricts Entry of Chinese Firms in Commercial Coal Mines

New Delhi : The central government has tightened the rules for companies from countries sharing land borders with India to participate in the ongoing auction of coal mines for commercial exploitation. The Ministry of Coal has issued a corrigendum for the tender document issued for commercial coal mining, according to which 100 per cent FDI in new activity is allowed under the automatic route, but investment proposals from land sharing countries with India will be accepted only through the government route. This means that the government will scrutinize such proposals before allowing any participation, then a decision will be taken.

Proposals of companies that also own or live in a country sharing land borders with India have to go through government scrutiny. The tender document clarifies that a citizen of Pakistan or an entity incorporated in Pakistan can invest in defense, space, nuclear power and foreign investment except in the restricted sector only after going through the government route.

The Ministry of Coal has issued the clarification so that investors know about their eligibility before bidding. The government had, through a press note 3 of 2020 issued earlier, approved the government route for all investments from land sharing countries with India. The move was to prevent the spread of Chinese companies in important and sensitive sectors of India. Later the border conflict between India and China in Ladakh laid a foundation, where official agencies are considering additional measures to stop investment and imports from the neighboring country. 41 mines with a total coal reserves of 17 billion tonnes have been introduced under the first phase commercial coal auction. It includes both large and small mines. These mines are located in five states. These states are Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra and Odisha.