{"id":85001,"date":"2025-11-17T00:00:00","date_gmt":"2025-11-17T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/mena-india\/morning-beijing-demands-fdi-reciprocity-as-indias-rare-earth-squeeze-continues\/"},"modified":"2025-11-17T00:00:00","modified_gmt":"2025-11-17T00:00:00","slug":"morning-beijing-demands-fdi-reciprocity-as-indias-rare-earth-squeeze-continues","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/mena-india\/2025\/11\/17\/morning-beijing-demands-fdi-reciprocity-as-indias-rare-earth-squeeze-continues\/","title":{"rendered":"MORNING: Beijing demands FDI reciprocity as India\u2019s rare earth squeeze continues"},"content":{"rendered":"

Good morning, wonderful people<\/strong>, and welcome to a fresh workweek. It\u2019s shaping up to be an investment-heavy week amid news that more Indian firms are looking at investment in Saudi Arabia to mitigate global risks \u2014 and as Beijing uses critical minerals to squeeze New Delhi for concessions on FDI. <\/p>\n

Energy is also in the headlines: <\/strong>Adani Group is lining-up clean-energy investments worth INR 630 bn (USD 7.1 bn) in three projects, IGL\u2019s partnership with Masah is taking India\u2019s city-gas operator to MENA, and the government is looking to list its renewable firm.<\/p>\n

MEANWHILE- <\/strong>SBI has joined the chorus on bank mergers, and Adani Group secures projects. <\/p>\n

^^ We have the rundown on all of this below. <\/p>\n

WATCH THIS SPACE- <\/p>\n

<\/a> #1- <\/strong>China is pressing New Delhi to <\/strong>ease restrictions on its foreign direct investment<\/strong> as a condition for lifting export curbs now faced by Indian manufacturers on rare earth minerals and auto components, Hindu Businessline<\/a> reports. The Chinese embassy, in a meeting with Indian EV manufacturers, signalled that India\u2019s virtual ban on Chinese investment must be addressed before special export licences for rare-earth magnets can resume. <\/p>\n

The FDI restrictions, commonly known as Press Note 3 rules<\/strong>, were imposed after the 2020 border clashes and require additional government approvals for all Chinese investments. <\/p>\n

REMEMBER- <\/strong>Since April, Beijing has required special licences for seven elements, forcing some Indian firms to cut down production. Sales remain on hold despite assurances from New Delhi that change is in the works. Chinese officials told the industry delegations that visiting Chinese suppliers \u201cwill not help\u201d until the policy deadlock is resolved<\/strong> by the government of India, the daily added. Beijing\u2019s stance dims hopes of near-term relief for India\u2019s EV and auto sectors, which have been pushing for access to key magnets even as New Delhi weighs national-security considerations.<\/p>\n

WHY IT MATTERS- A rare FDI logjam: <\/strong>Press Note 3 mandates prior government approval for any foreign investment from countries sharing a land border with India. While not naming China, the rule effectively puts inbound Chinese capital under an additional layer of tight scrutiny, slowing approvals for acquisitions, greenfield projects, and imports from Chinese firms.<\/p>\n

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#2- State Bank of India (SBI), <\/strong>India\u2019s<\/strong> largest lender, is backing a fresh phase <\/strong>of bank mergers <\/strong>in support of a drive by the Modi government to create globally competitive, large-scale lenders in the country, Bloomberg<\/a> reports. There are still \u201csome smaller, sub-scale banks\u201d to fuel another round of mergers, SBI Chairman Challa Sreenivasulu Setty told Bloomberg. <\/p>\n

BACKGROUND- <\/strong>Policymakers are engaged in discussions aimed at enhancing the scale of the banking sector. The goal: To better position the nation\u2019s banks to back large-scale infrastructure and industrial projects. Mumbai-based SBI commands 25% of India's USD 2.1 tn credit market with a balance sheet of USD 787 bn serving c. 500 mn customers. <\/p>\n

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<\/a> #3-<\/strong>The <\/strong>Modi government is advancing plans for the IPO of the Solar <\/strong>Energy Corp. of India (SECI)<\/strong>, a key state-run entity that has played a key role in the buildout of 30 GW worth of green energy projects, Bloomberg<\/a> reports. No timeline is yet in place for the offering, the business information service says.<\/p>\n

IN CONTEXT: <\/strong>The government is looking to leverage market enthusiasm for green stocks after a wave of listings by Indian green energy firms including power producers and solar panel manufacturers. <\/p>\n

SPEAKING OF GREEN ENERGY\u2026 <\/strong>Outstanding<\/strong> bank credit to India\u2019s renewable energy <\/strong>sector more than doubled to INR 148.4 bn (USD 1.78 bn) as of September<\/strong>, up from INR 67.8 bn (USD 810 mn) a year earlier, Hindu Businessline<\/a> reports, citing central bank data. The jump reflects faster execution of solar and wind projects as supply-chain delays eased and input costs stabilized.<\/p>\n

What\u2019s driving credit? <\/strong>Most of the new lending is going to under-construction utility-scale solar and wind projects, supported by lower GST on renewable energy equipment. Projects are rolling out as solar component prices plunge thanks to expanded domestic manufacturing. <\/p>\n

By the numbers: <\/strong>India added nearly 28 GW of new renewable capacity between April and October 2025, taking total installed capacity, excluding large hydro, close to 200 GW. <\/p>\n

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#4- Relief for exporters hit by US tariffs: <\/strong>The Reserve Bank of India (RBI) has announced<\/a> trade relief measures, including a moratorium on term loan repayments due between 1 September and 31 December 2025 for exporters impacted by US trade restrictions. The tariffs, which reach as high as 50%, have hit key sectors including garments, jewellery, leather goods, and chemicals. <\/p>\n

How will it work? <\/strong>Interest will accrue throughout the moratorium on a simple, non-compounding basis, with eligibility restricted to borrowers in 20 specific sectors designated by the RBI. <\/p>\n

The central bank has also given exporters six months of additional breathing room to <\/strong>repatriate export proceeds <\/strong>and convert them into INR. Exporters will now have 15 months to get paid by their offshore clients and bring the money home. <\/p>\n

And exporters taking advantage of export credit will see their loan tenors extended to <\/strong>450 days <\/strong>(from 270) on facilities taken out through 31 March 2026. The measures came into effect immediately. <\/p>\n

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#5- <\/strong>Tata<\/strong> Steel wants the government to extend import tariffs on select steel products<\/strong>, after temporary duties imposed in April to curb Chinese inflows expired last week, Reuters<\/a> reports, citing CEO TV Narendran. Even limited imports \u201cdisturb the market,\u201d as Chinese oversupply crowded Indian producers out of export markets, Narendran noted. <\/p>\n

The world\u2019s second-largest crude steel producer<\/strong> has seen global markets \u201cflooded\u201d with <\/strong>Chinese steel<\/strong>, leaving local mills exposed. Tata Steel\u2019s Europe and UK units, previously exporting 800k tonnes to the US, have been hit by tariffs imposed by the Trump administration. The company is redirecting volumes to Latin America, parts of the Middle East, Europe, and Africa, while urging the UK to curb cheap imports.<\/p>\n

HAPPENING TODAY-<\/p>\n

A UAE delegation will visit India and Singapore starting today through Friday<\/strong>, 21 November in a bid to boost bilateral trade and explore new investment, Abu Dhabi Media Office<\/a> reports. The delegation will meet with policymakers, investors, and business leaders in both countries to strengthen partnerships across sectors including AI, agritech, healthcare and life sciences, renewable energy, advanced technology, financial services, manufacturing, and logistics.<\/p>\n

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HAPPENING THIS WEEK-<\/p>\n

Tenneco Clean Air India shares will make their debut on the NSE and BSE on<\/strong> Wednesday, 19 November. Also on Wednesday, the ET Global Capability Centers<\/a> and Bengaluru Tech<\/a> summits get underway.<\/p>\n

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THE BIG STORY ABROAD-<\/p>\n

The notorious Epstein files are dominating what\u2019s otherwise a quiet day in the <\/strong>international press.<\/strong> The divide is intensifying in Congress over whether to release the files related to the trafficking investigation into disgraced financier Jeffrey Epstein, with calls for full disclosure reportedly gaining more and more ground in the House despite resistance from President Trump and GOP leaders.<\/p>\n

The renewed split comes after a House committee released some 20k new pages from <\/strong>the files last week<\/strong>, containing mentions of (or correspondence with) prominent figures \u2014 including Trump. The president retaliated by directing the Justice Department to open an investigation into Epstein\u2019s ties with Democrats, a move that some say fanned the flames even further. (Washington Post<\/a> | Associated Press<\/a> | Semafor<\/a>)<\/p>\n

MEANWHILE- BTC is reminding everyone just how volatile cryptocurrencies are<\/strong>, erasing more than 30% in YTD gains only a month after reaching an all-time high. The top cryptocurrency fell below the USD 94k mark yesterday, before paring back losses to trade at USD 94.9k. (Bloomberg<\/a> | Reuters<\/a>)<\/p>\n

ALSO WORTH READING THIS MORNING-<\/strong><\/p>\n