Can the India-China border skirmishes spur Indian economic growth?

THE hand-to-hand combat between Indian and Chinese border troops, which is unlikely to escalate into a limited border war, has been bad for regional harmony. But it has had no impact on companies and consumers of both countries that have benefited right through their skirmishes.

Chinese investment stakes in India are enormous. The Brookings Institute of Washington DC estimated that Chinese companies' total investment in India crossed US$26 billion in March this year. Chinese individual investors and companies have been ramping up their foreign portfolio investments (FPI) despite the border stand-off in 2017. The inflow of FPI from China into Indian-listed companies rose sharply during the quarter that ended on March 31, 2020, due largely to the purchase of a 1.01 per cent stake in HDFC Limited by the People's Bank of China, according to the online source nseinfobase.com belonging to the Prime Database Group.

Besides HDFC Ltd, the Indian-listed companies where FPIs from China have taken over 1 per cent stake are Avanti Feeds (8.77 per cent), Kingfa Science & Technology (6.32 per cent), and Kiri Industries (2.29 per cent). Chinese companies are major investors in more than half of the 30 unicorns (startups worth at least US$1 billion) in India. Alibaba and Tencent are investors in more than 10 of these unicorns such as Zomato, Paytm, Byju, Ola Cabs, and BigBasket, among others.