Illustration: Chen Xia/GT

Indian Ambassador to China Vikram Doraiswami said on Saturday that greater investment from China into India is good both for the economics of the relationship and for broader bilateral ties, The Hindu reported. 

The remarks carry a constructive tone and suggest a more pragmatic approach to Chinese investment, which is welcome.

Chinese investment, like investment from other sources, will support India's economic development. It could increase Indian tax revenues and employment, while contribute to the country's efforts to expand manufacturing base, both of which are important for India's economy. 

Against the backdrop of India's earlier restrictions on Chinese investment, Vikram Doraiswami's latest remarks indicate a more open posture, which could help nurture better conditions conducive to future investment cooperation between the two countries.

Recent months have seen more positive developments. One that has drawn public attention was a news report by the Times of India in March that India had approved changes to its foreign direct investment (FDI) policy governing investments from countries sharing land borders with India, including China. The report said that India had introduced a 60-day decision timeline for proposals in certain manufacturing sectors.

Whether these gestures and moves will encourage Chinese investment to India, address Chinese investors' prior concerns, and ramp up their confidence in investing in India will ultimately be borne out in the data - specifically, in actual changes in Chinese corporate investment flowing into India. 

If the growth of such investment still falls short of expectations, or if there is greater cooperation potential remaining untapped, further efforts are needed to accelerate India's approach to attract Chinese investment.

Commenting on the rules issued by India in March, the Chamber of Chinese Enterprises in India said in a statement sent to the Global Times at that time that the adjustment in India's investment policy toward China is a "partial optimization" rather than a "comprehensive liberalization." 

The statement suggested that, at least at that point, concerns among Chinese companies had not been fully addressed. If India truly wants to attract Chinese capital to give a boost to its economy, the country ought to remove all the restrictions imposed on Chinese investment.

The broader development trajectory of China-India relations should provide a more favorable backdrop. According to a press release from the Chinese Foreign Ministry last month, Chinese Foreign Minister Wang Yi said during his meeting with Indian National Security Advisor Ajit Doval in New Delhi in June that under the guidance of the leaders of the two countries, China-India relations have "gradually emerged from a low point and returned to a track of recovery and improvement."

Against the background of the recovery and improvement in China-India relations, India needs to consider further broadening and accelerating its efforts to encourage Chinese investment, given the potential contribution such investment can deliver to India's economic development. At a minimum, Chinese investors should be given a fair, transparent and non-discriminatory investment environment.

From the perspective of economics, investment can help strengthen linkages between Chinese and Indian industrial chains, supporting greater bilateral trade on a mutually beneficial basis. It may also help expand India's future exports to China.

Chinese customs data show that India's exports to China reached $10.157 billion in the first five months of this year, up 36.1 percent year-on-year. This suggests that the Chinese market has continued to offer good opportunities for Indian enterprises despite global trade uncertainties.

The scale of the Chinese market, alongside a range of other factors, suggests there remains room for further cooperation between China and India. How to expand such cooperation will test New Delhi's policy judgment. Facilitating Chinese investment and providing Chinese investors with a fair environment could serve as a useful starting point. India could do more.