The Indian media calculated that India had lost $15 billion in four years due to tensions with China

Lu Lu views the world

2024-06-18 17:40Posted in Shanxi Global Times host, reporter

In recent years, India has imposed a very strict visa policy on Chinese citizens, which has not only brought great trouble to Chinese enterprises in India, but also seriously affected the business exchanges and cooperation between China and India. India's electronics manufacturing industry has lost up to $15 billion and up to 100,000 jobs in the past four years due to growing tensions with China, according to a number of Indian media reports.

Executives from India's electronics manufacturing industry revealed that "at present, there are four or five thousand visa applications from Chinese business executives, which have been waiting for the approval of the Indian government." This has not only hindered the further expansion of India's electronics manufacturing industry, but also prevented many projects from running smoothly due to a lack of key personnel.

Although the Indian government claims that "a mechanism has been put in place to process business visa applications within 10 days", the reality is that the visa approval process still takes more than 30 days. In addition, many Chinese engineers are very cautious about traveling to India to work due to concerns about the risk of possible arrest in India. An anonymous source in the Indian industry revealed that "if India needs 50 Chinese engineers to assist in building factories in India, only 20% of them are willing to come."

To address this issue, the Information Technology Manufacturers Association of India and the Mobile Phone and Electronics Association have put pressure on the Indian government to speed up the approval of visas for Chinese executives. They stressed that "India cannot do without the assistance of Chinese executives in the installation, commissioning and maintenance of relevant production equipment, the transfer of technology and skills, and the establishment of efficiency processes".

"The Indian government's 'Production-Linked Incentive Scheme', which was originally intended to facilitate the transfer of supply chains to India, has been severely affected due to current visa restrictions," the Mobile Electronics Association of India (IHE) added. They estimate that "if business activity between China and India returns to normal, the domestic value added of Indian companies will be 4-5 percentage points higher than it is now, and it will also bring an additional contribution of about $1.8 billion a year to India's mobile phone industry."

However, due to tensions between China and India, as well as India's increasing scrutiny of Chinese companies, many Chinese companies have chosen not to increase their investment in India. An Indian industry executive is concerned that "if these Chinese companies eventually choose to leave India, it will be difficult for Indian consumers to obtain better products and services, and India will face more serious unemployment problems and the closure of related factories in India."

Another Indian industry source pointed out that "Chinese mobile phone manufacturers are cautious about participating in the Indian government's "production-linked incentive scheme", which will undoubtedly lose many economic development opportunities. Since 2020, India could have generated at least $5 billion more in export earnings if Chinese companies had not been excluded from the program."

Chinese mobile phone maker Vivo, for example, is currently facing strong pressure from the Indian government to "localize". India's Tata Group is said to be in talks with Vivo India to acquire a majority stake or form a joint venture, and the Indian government expects local partners in India to own at least half of the shares in joint ventures with Chinese mobile phone companies, and wants the executives in these joint ventures to be local to India.

Some Indian industry insiders pointed out that "at present, India's mobile phone manufacturing industry is still dominated by Chinese mobile phone brands, and the Indian government's intention is undoubtedly to increase the influence of local Indian enterprises and executives in India's domestic mobile phone industry." However, the market economy emphasizes free competition and fairness, and excessive intervention by the Indian government may have a negative impact on the confidence of other countries' enterprises to invest in India.

The US media also mentioned previously that the Indian government has always wanted to kick Chinese companies out of the supply chain, but this is doomed to fail. It is important to know that the Indian market is very limited, and it is unlikely that companies from other countries will move the entire supply chain to India. India's rejection of investment and technology from Chinese companies will only make it more difficult for it to develop.

In addition, China currently dominates most of the world's supply chains, and it is almost impossible for the Indian government to create an entirely new market that completely excludes Chinese companies and products. Even if some countries want to reduce their dependence on China, they need to maintain a close relationship with China now and for some time to come.

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