Chinese media was upbeat on Indian market. According to Global Times – a respected English-language newspaper published in China, “More Chinese phone makers are considering relocating their production bases to Indian market”. Acceding to this movement, it added: “Chinese companies are bringing their assembly lines to India are exactly what the country needs to recover economic momentum and revive Make in India”.

Caught in the uncertainty over domestic investment, foreign investment is seen as a strong engine to drive the Make in India movement. Chinese investment, though small as compared to investment by leading investors like Singapore, Japan, Netherland, UK and USA, is considered more pertinent for the Make in India initiative.

Make in India depends on four main pillars. First, to boost manufacturing and gain more share in GDP. Second, to make India a global hub for manufacturing. Third, manufacturing should widely be spread length and breadth in the country. Lastly, manufacturing should be the main aim for employment generation. To this end, Chinese investments are considered beneficial for Make in India's principle objectives.

Chinese investment in India spurred during the past two years. It increased by 136.8 percent in 2018 – from US $ 165.3 million in 2017 to US$ 391.2 million in 2018. Five years ago it was merely US$ 72.3 million in 2013.

China was never seen a foe in terms of economic relation My Mr Modi. His hobnob with China was not sudden and new as a Prime Minster of India. His vie for Chinese investment began with his stint as Chief Minister of Gujarat. He visited China four times as a Chief Minister. His yearn for engaging China as an important economically overwhelmed the China’s authority.

Today, India is the second largest producer of mobile phones in the world, according to Chairman of India Cellular and Electronics Association (ICEA). From a mere two companies manufacturing mobile phones in 2014, today the country has 265 companies engaged manufacturing mobile phones and accessories, with substantial investment from China.

India is second biggest market for mobile phones in the world – ahead of USA and behind of China. In smartphones, China established a strong foothold in Indian market, outsmarting Koreans. Over 67 percent market share of smartphones is held by Chinese companies in the country. Of the top six smartphone makers, four are Chinese. They are Xiaomi, Vivo, Realme and OPPO.

Market leader Xiaomi, which had one manufacturing unit in 2015, now has seven facilities in the country.

Nearly 95 percent of consumption of mobile is met by domestic production. Thus, manufacturing of mobile phone exemplifies the success of Make in India, driven by Chinese investment.

Chinese companies have made an active role to boost start-ups in the country. Start-up is a new movement for technology-driven manufacturing and employment generation during Modi regime. China made a big entry in financing the start-ups and made a strong pitch for the growth of this sector in the country. According to an estimation, Chinese VCs (Venture Capital) invested US $ 5 billion in 2018, compared to US $ 3 billion in 2017 and US $ 668 million in 2016.

Among the top Chinese investors were Alibaba, Shunwai Capital, Fosun, Tencent and Xiaomi. Sectors attracted for Chinese VC funds are consumers, food-tech, logistics, retail, AI (Artificial Intelligence), IOT (Internet of Things) and fintech.

Factors, which attributed to Chinese investment in overseas were slow growth in its domestic market and their start-up funding slowing down. Looking for investment opportunities in overseas, India was perceived a fast emerging market, Global Times, said. A large and young population, who are increasingly using internet, makes India a big market, it said.

Correspondingly, paucity of funds in India gave ample opportunities to the entry of Chinese VCs. The size of Indian start-ups is comparatively smaller than Chinese. This facilitated Chinese VCs crowded in Indian market.

In the first wave, Chinese VC majors in technology start-up entered Indian market. E-Commerce giant Alibaba is a case in point. It invested large sum in Snapdeal, Paytm and Big Basket. Tencent invested in food delivery , such as Swiggy, gaming Dream11 and online insurance, like Policy Bazar.

In the second wave, investment came from financial investors, such as Shuewei Capital. It invested in food delivery start-up, such as Zamato.

Eventually, increasing Chinese investment had a cascading impact on trade balance between India and China. The concern over rising trade balance with China started mitigating with the deficit trade balance narrowing down. Trade deficit with China - which heightened to US $ 63 billion in 2017-18 - receded to US $ 53 billion in 2018-19. This resulted a decline in total trade deficit by 15 percent in 2018-19.

Thus, Chinese investment unleashed a big benefit to Indian manufacturing sector and countering the widening trade balance of the country. First, it imparted onslaught on trade balance and secondly, by boosting manufacturing of mobile phones and supporting start-ups, which widened the employment opportunities.

Given the Chinese investment binge and it being an important member of BRICS, Chinese investment harps on uptick in India’s growth trajectory through a new face of Make in India. Underpinning the Chinese significance in increasing the investment, which is the need of the day for revival of the economy, NITI Aayog evinced interest in Chinese investment.

Both NITI Aayog and National and Reform Commission of China entered several agreements for economic cooperation in 2016. NITI Aayog Vice Chairman Rajiv Kumar urged Chinese investors to invest export oriented industries and export to the world, after losing opportunities in USA due to trade war. (IPA Service)