India Mulls Easing Curbs On Investments From China Amid Strained Ties

Days after the Economic Survey highlighted the need for Chinese involvement in India's manufacturing sector, the government is reportedly mulling over easing restrictions on investments from China.

This shift in policy is being considered in response to strong calls from industry players, particularly manufacturers, to relax visa restrictions on Chinese technicians.

According to a senior government source cited in a report by The New Indian Express, discussions are ongoing to review restrictions on Chinese investments and imports.

However, no final decision has been reached yet in this regard, the source noted.

In 2020, amid border tensions in the Galwan valley, India had restricted Chinese investments in the country. Additionally, the government imposed visa restrictions on Chinese nationals and increased duties on Chinese imports.

Industry leaders have reportedly raised concerns about their inability to secure equipment and Chinese technicians due to these restrictions.

“For the past 3-4 years, we have been trying to build our own capacity. But feedback from industry suggests that large projects, especially high-tech projects, are facing challenges in completion due to these restrictions,” the source was quoted as saying in the TNIE report.

The government is now weighing options for easing investment rules for some companies, the source added.

The Economic Survey presented in Parliament on Monday (22 July) underscored the need to integrate with China's supply chain to boost Indian manufacturing.

“To boost Indian manufacturing and plug India into the global supply chain, it is inevitable that India plugs itself into China’s supply chain. Whether we do so by relying solely on imports or partially through Chinese investments is a choice that India has to make,” the Economic Survey report said, suggesting that the anti-China policy has been detrimental to India's manufacturing sector.

According to the officials, the government has already relaxed visa rules for Chinese technicians working in companies under the production-linked incentive (PLI) scheme.

The Centre is now working to streamline the visa process for Chinese workers for non-PLI companies too.

Chinese technicians are highly sought after in 14 sectors that benefit from production-linked incentive schemes. These sectors, including solar, drones, and cell batteries, are experiencing significant talent shortages.

Many high-tech manufacturing units in India rely on Chinese-made machinery but lack skilled technicians. The industry believes that relaxing visa restrictions could help address this issue.

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