NEW DELHI: India is likely to ease restrictions on Chinese investment in non-sensitive sectors like solar panels and battery manufacturing where New Delhi lacks expertise and which hinders domestic manufacturing, two government sources said.

The government plans to free up sectors to Chinese investment that it deems less sensitive from a security point of view, said one of the officials, who did not want to be named.

The plans mark the first step in improving economic ties between the two neighbors, a relationship that worsened after clashes in the remote Himalayan border in 2020, after which India tightened scrutiny on investments from Chinese companies.

The non-critical sectors “would be decided on a case-to-case basis,” the second official said, but curbs on Chinese investments in electronics and telecom would continue.

China says India has no right to develop contested border region

The prime minister’s office, foreign, finance, home, and trade ministries did not respond to requests for comments

Top government officials have been open to reviewing their stance against Chinese investment in the last few months as foreign investment has fallen to 17-year lows.

Finance Minister Nirmala Sitharaman’s support of better economic ties with China on Tuesday was the first such public comment made by a ranking cabinet minister in the Modi government.

On Monday, Chief Economic Adviser V. Anantha Nageswaran said New Delhi could promote foreign direct investment from China to boost India’s exports.

The plans, if confirmed, could unlock investments from Beijing worth billion of dollars that were blocked by India over the last four years.

India has also virtually blocked visas for Chinese nationals since 2020 but may ease these restrictions for Chinese technicians as the move has hindered investments.