BEIJING-China’s Ant Group, the fintech arm spun out of Alibaba Group, will reduce its stake in Indian fintech payment company Paytm to 13.5 percent from 23.8percent amid a worsening investment environment in the South Asian country. The 10.3 percent stake, valued at about $628 million, will be transferred from Ant’s Netherlands company Antfin to a Netherlands group owned by Paytm’s founder and chief executive Vijay Shekhar Sharma.
The move comes as Chinese investment faces increasingly biased scrutiny by the Indian government. In a similar case, Chinese electric vehicle maker BYD in July told its Indian joint-venture partner that it would shelve a $1 billion investment in an electric car factory as its proposal faced politically biased scrutiny from New Delhi, citing so-called security concerns. The Indian government’s repeated malicious crackdown on Chinese companies has created a strong sense of insecurity among foreign enterprises. This reveals the exclusionary nature of India’s monopolistic capitalists, Liu Zongyi, Secretary-General of the Research Centre for China-South Asia Cooperation at the Shanghai Institutes for International Studies, told the media.
Over the past two years, India has taken measures to block Chinese companies, including launching broad investigations into tax and income issues for Chinese companies operating in the country, banning more than 300 Chinese apps and tightening investment rules for Chinese companies. Amid the drive by the US to “decouple” from China, India harbors the misconception that cracking down on Chinese companies could be an opportunity for its own development. However, “It is certain that India’s chances of success in this plan are close to zero,” Liu said. The Indian manufacturing sector’s value-added as a share of GDP fell from about 16 percent in fiscal year 2015-16 to below 13.32 percent in fiscal year 2022-23, according to media reports.
Despite India’s welcoming words to foreign investment in recent years, its business environment remains far from satisfactory. Ideological considerations often take precedence, and many of its politicians lack sufficient knowledge of economic development, Liu noted.