LAC Flashpoint Impact: Maharashtra Puts On Hold Chinese Deals Worth Rs. 5,000 Crore

The Maharashtra government led by Chief Minister Uddhav Thackeray put on hold Chinese investments worth about Rs.5000 crore in the state including an MOU signed with Great Wall Motors, according to media reports. While it was stated that the Centre had advised the state government on the move, the Maharashtra government is reported to have clarified that it was a step taken by the state on its own.

The Maharashtra government decision comes in the wake of the Centre's communication seeking details with regard to Chinese investments as well as import-export trade from state governments, as was widely reported.

The three significant MOUs to have been frozen for now are ones with Great Wall Motors worth about Rs. 3,700 crore, a Rs. 1,000 crore deal with PMI Electro-Mobility Solutions and Hengli in the range of Rs. 250 crore. Media reports added that the state government would await the Centre's guidance on the way forward. Great Wall Motors was to launch its first car in the 2021, but the government's decision to freeze the deal for now, casts a shadow on the MoU.

The decision to put Chinese investments on hold comes in the wake of the Galwan Valley clash between Indian and Chinese soldiers in Eastern Ladakh on June 15, which left 20 Indian military personnel martyred including the Commanding Officer of the unit, Col. B. Santosh Babu.