A recent move to amend the 49-year-old Enemy Property (Amendment and Validation) Act which would allow the Narendra Modi government to auction over 9,400 properties of those who took citizenship of China has made China jittery.
India and China were engaged in a stand off for months last year over construction by Chinese troops in the Doklam region. Although the conflict was subsequently resolved, tension continues in India-China relations.
In recent years, there has been a sharp jump in Chinese investment in India. China fears that India can take over assets of Chinese companies such as Xiaomi and Lenovo, in case of conflict between the two countries.
Investor Confidence Can Be Hit
An article in the state- operated Chinese news outlet Global Times stated that the Indian government could choose to confiscate the assets of Chinese companies in case of “military conflict.”
The report noted that the economic reforms introduced by PM Modi had made India attractive as an investment destination but the amendment of the law can scare away Chinese investors.
It further pointed out that confiscating of assets left behind by people who have taken citizenship of China can be viewed “as a hostile act against China” and can “damage China’s outbound investment”.
The report noted that China’s direct investment in India in 2016 was said to be several times that of the previous year and helped generate employment in India. It has warned that unless India reassures Chinese investors with steps to “ensure the safety of their assets or personnel”, the proposed amendment of the Enemy Property Act will “hit investor confidence”
Properties Held By Pakistanis And Chinese Nationals
Data provided in a report of the parliament select committee on the bill has given details of properties owned by foreign nationals in India, a majority of which belongs to Pakistanis:
There are 9,280 immovable properties belonging to Pakistani nationals encompassing 11,882 acres, with its total value being Rs 1.04 lakh crore. Other assets include:
- Movable properties comprising shares in 266 listed companies valued at Rs 2,610 crore
- Shares in 318 unlisted companies valued at Rs 24 crore
- gold and jewellery worth Rs 0.4 crore
- Bank balances of Rs 177 crore
- Investment in government securities of Rs 150 crore and
- Investment in fixed deposits of Rs 160 crore.
Around 149 immovable enemy properties of Chinese nationals are with the custodian in several states like West Bengal, Assam, Meghalaya, Tamil Nadu, Madhya Pradesh, Rajasthan, Karnataka and Delhi.
According to a 2008 ET Intelligence Group investigation, the shares that have been vested to the custodian are in listed companies such as Cipla, Wipro, ACC, DCM group companies, Tata, Hindustan Unilever, India Cement, and Aditya Birla Nuvo.
