“Once Modi takes office, he is expected to exhibit some flexibility in economic policy with China but will also create some new problems on bilateral trade frictions."
China's current foreign direct investment in India stands at $940 million.
According to Hu, the shortfall resulted from India's politicisation of economic issues.
"Compared with capital from the US, Japan and South Korea, India has taken a more cautious and restrictive policy toward Chinese investment."
The barriers imposed by Indian authorities had led to a withdrawal of most small and medium-sized Chinese companies from the market in India's tech hub Bangalore, Hu said.
Updated on: May 14, 2014 17:59 IST
