India looms large for Chinese overseas direct investment

By Santosh Pai, Nusrat Hassan, D H Law Associates
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China and India are hardly strangers when it comes to doing business with each other. Bilateral trade between the two countries touched US$74 billion in 2011, representing a prolific annual average growth rate of more than 33% for 10 consecutive years.

Santosh Pai D. H.律师事务所 合伙人 Partner D.H. Law Associates
Santosh Pai
D. H.律师事务所
合伙人
Partner
D.H. Law Associates

The stage now appears to be set for an upswing in Chinese outbound investment flows into India. We examine some of the indicators and contributing factors that foretell this likely trend.

Search for high-growth markets

Until now the major driver for Chinese overseas direct investment (ODI) has been access to resources and technology. The recent slowdown in the Chinese economy has made access to resources less important. Massive domestic investment in research and development is being undertaken to address China’s technology needs, since ODI alone will not be a sustainable source.

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