In mid-March 2020, German media reported that the United States President had offered to take over CureVac, a German vaccine firm which was working on a vaccine for COVID-19, to secure the vaccine only for the United States – these reports were later denied. Indian media has recently reported that the Chinese central bank now holds more than 1% shareholding in HDFC, India’s largest housing finance company. The COVID-19 pandemic has not only brought healthcare and critical infrastructure into focus from an FDI perspective, but has also weakened companies in other sectors and made them easy targets for creditors and opportunistic buyers.
This note examines the measures taken by certain countries, particularly in Europe, to protect their businesses from being taken over by foreign investors as well as India’s current position on FDI. While India has so far focused on liberalizing the FDI regime, if COVID-19 propels the Indian Government to follow suit, investors can expect introduction of additional restrictions on FDI as well as extended timelines for approval.