Chinese real estate giant, Dalian Wanda seeks wonder concessions for $10-billion plans

Dalian Wanda, Chinese real estate giant has announced its plans to invest $10 billion in India and is now looking for concessions for an industrial park project to be developed in Haryana along with its other projects.

The company, earlier this year said that it would start working on a 13 sq km park in Sonepat.

Many of its demands aren’t within the current investment policy framework and ministers, departments and regulators are now being pursued by the Department of Industrial Policy and Promotion (DIPP) to give the Chinese giant some sort of a leeway.

The Chinese real estate tycoon wants to bring an amount of $10 billion to India, which exceeds the ECB (external commercial borrowings) limit, which is $750 million. The matter now has been referred to the RBI by the DIPP. RBI is said to have suggested that Wanda do this either through rupee dominated bonds or masala bonds, as it breaches the ECB limit.

The Chinese company is going after concessions that are only applicable to special economic zones such as breaks on corporate and service tax besides customs and import duties. It also wants these concessions extended to companies that will setup units in its project.

"The company's project cannot be declared an SEZ, we are discussing it with other ministries if something can be worked out," a senior official told ET.

There are certain demands by the company like concessions on minimum alternate tax and dividend distribution tax which are not even provided to the Indian companies. These demands will be harder to fulfill.

The proposed investment will amount to several times the total FDI inflow from China to India. Between 2014 and 2016, this amounted to $956 million. Between April 2000 and June 2015, India got $1.16 billion in FDI from China, 0.45% of the total that came into the country during this period.
(image:Reuters)