Impact of Indo-China relations on funding ecosystem

Ms. Roma Priya, Founder of Burgeon Law:

With recent events of Indo-China face-off and developments of scrutinizing the FDI from nations that share a land border with India, the situation depicts a tightness between the neighboring countries. The immediate impact of this can be observed in business relations as well, with contract cancellations, trade deficit, and fundings being put on hold. To mitigate this direct impact on the startup ecosystem, startups will have to scout for other avenues for big-ticket investments while seeking support from investors from newer geographies. Companies that fall under the portfolio of Chinese investors will also have to look for new alternatives as their transactions will get delayed due to these macro events.


Also, the government’s decision on FDI norms was much anticipated in order to eliminate the hostile takeovers. The Indian economy has a great potential and it is important for us to raise our stake in the corporate assets which can grow to be some of the most lucrative business entities. The global economy has been severely hit by the pandemic, and it is going to take a while till the figures bounce back to normalcy. Considering the dominant state of China, many other economies are also mulling about implementing this measure to avoid any opportunistic takeovers by China. Offshore capital is paramount for India’s startup ecosystem and China has been one of the major power backers of our unicorns. Hence, we hope the government issues detailed guidelines in terms of timelines and procedures for seeking approval or creates certain exceptions for startups.

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