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The Global Trade Research Initiative (GTRI) has said that increasing foreign direct investment (FDI) from China in the domestic market may benefit in the short-term but it risks undermining India's long-term economic security and strategic autonomy. It said dependence on Chinese firms for key manufacturing capabilities could also expose India to supply chain vulnerabilities and geopolitical risks.  

GTRI has said that Chinese firms investing in India may prioritise their own supply chain efficiencies, potentially sidelining local industries and reducing opportunities for home-grown companies to thrive. Additionally, it said there is a risk that the employment generated might not meet expectations if Chinese firms bring in their own managerial and technical staff, limiting the benefits to the local workforce. It said it is crucial for India to develop policies that genuinely support local industry and create meaningful employment opportunities for its population.

It further said while Chinese companies investing in India and exporting to Western markets might seem beneficial in the short term, it risks undermining India's long-term economic security and strategic autonomy. It also said that China is already the largest import supplier for India in each of the eight industrial product categories. Allowing Chinese firms to 'Make in India' risks overwhelming domestic industries, potentially leading to the closure of many Indian businesses and this could transform India from a manufacturing hub into merely a trading nation, dependent on Chinese firms for critical supplies and economic growth.