Asia News Jul 01

India bars Chinese companies from highway projects

Halt to investment in small business is also included in latest retaliatory move after killing of 20 soldiers in disputed territory, writes Sumit Sharma 

India bars Chinese companies from highway projects
Members of Gujarat Rashtriya Rajput Karni Sena organisation stamp upon upon a Chinese TV screen during a protest against vendors selling Chinese products at a market in Ahmedabad on July 1, 2020. SAM PANTHAKY / AFP

(ATF) India plans to disallow Chinese companies from participating in highways construction and investing in micro-, small- and medium-sized enterprises (MSME), Nitin Gadkari, minister for road transport and highways said in New Delhi.

 Relations between Asia’s two largest countries soured after India alleged the People’s Liberation Army (PLA) encroached into Indian territory in Ladakh. After more than a month-long standoff, the PLA killed 20 Indian army soldiers in a June 15 clash. China claims Indian soldiers had entered its territory. 

Upset at China’s refusal to vacate the region, India has initiated measures to reduce business and economic relations with its northern neighbour.

``We will not give permission to joint ventures that have Chinese partners for road construction,’’ Gadkari, whose brief also covers MSMEs, told the Press Trust of India in an interview. ``We have taken a firm stand that if they (Chinese companies) come via joint venture in our country, we will not allow it.’’ 

READ MORE: Chinese goods held up at Indian ports

READ MORE: India, China hold talks to de-escalate deadly border tensions

India on Monday banned 59 Chinese Apps alleging ``they are engaged in activities which is prejudicial to the sovereignty and integrity of India, defence of India, security of state and public order”. For ByteDance-owned TikTok, India is one of its largest markets.

Indian states including Maharashtra and Uttar Pradesh are initiating steps to prevent Chinese companies from bidding for local projects.

``For upgrade of technology, research, consultancy and other works, we will encourage foreign investment and joint ventures in MSMEs but in case of Chinese (companies) we will not entertain them,’’ Gadkari said. ``Even if we have to go for foreign joint ventures in the areas of technology, consultancy or design, we will not allow the Chinese (to participate).’’

Trading partner

China has rapidly become one of India’s largest trading partners, after two decades of meagre exchanges. India has a trade deficit of about $53 billion with China. Chinese imports include some critical items, including pharmaceuticals, auto parts, fertilisers, organic chemicals, electronics and investment in start-ups.

 The Indian government is reworking bidding processes to help local companies qualify for projects.

``We have taken a decision to relax norms for our companies to ensure that they qualify in bidding in large projects,” Gadkari said. “I have directed the highways secretary and NHAI chairman to hold a meeting for relaxing technical and financial norms so that our companies can qualify to work.’’

In a related action, reports suggest state-run telecom companies Bharat Sanchar Nigam and Mahanagar Telephone Nigam are reworking the tender process with a view to keep out potential Chinese bidders such as Huawei and ZTE.