Easing of visa restrictions good for improvement of China-India ties

In a move that could help ease strained China-India economic and trade relations, New Delhi is reportedly planning to speed up the process of issuing visas for Chinese engineers and technicians in a bid to make up for the delays at manufacturing units that have already cost the country billions of dollars. The technicians are mainly needed to operate Chinese-made machinery installed in India’s high-tech manufacturing units in industries ranging from telecommunications to steel production and solar panels.

The Indian Department for Promotion of Industry and Internal Trade is trying to formulate a framework along with the ministries of home and external affairs that will fast-track visas for Chinese engineers and technicians, with the aim of reducing the visa processing time to 30 days or less from the previous period of four to five months, according to reports.

India virtually stopped issuing visas to Chinese visitors following a deadly clash between Chinese and Indian troops in a disputed border area in June 2020. Reports from the Indian media suggest there was subsequently a significant decline in the issuing of visas to Chinese nationals, dropping to 2,000 so far in 2024 compared with around 200,000 in 2019. Other restrictive measures India has taken against China include the prohibition of hundreds of Chinese mobile apps, delays in approvals for Chinese investments, and a reduction in the number of direct flights between the two countries.

Yet these measures have been a double-edged sword as they have also taken a toll on India’s economy. For example, the Indian government’s visa restrictions have already caused production losses of $15 billion for the electronics manufacturing sector alone in the last four years, The Economic Times newspaper has said, citing an industry estimate.

The situation, if it remains unchanged, will certainly hinder Indian Prime Minister Narendra Modi’s ambitious “Make-in-India” initiative aimed at boosting manufacturing and turning the country into a global manufacturing hub. The program includes plans to cut red tape, develop infrastructure and make it easier for companies to do business in India.

Such measures to enhance confidence and convenience are exactly what the country needs given the capriciousness of the government departments when it comes to dealing with foreign companies doing business in India. Despite the country’s seemingly vast and promising consumer market, a string of prominent multinational companies including electronics giant Foxconn have been forced to exit, scale down or consider pulling out of the Indian market over the years because of the harsh business environment in India in terms of taxation and arbitrary law enforcement. In the World Bank’s Global Doing Business report, India used to be ranked as one of the worst countries in the world to start a business, which earned it the reputation of being a “graveyard for foreign companies”.

Chinese companies have been among the biggest victims, especially because of an orchestrated campaign against Chinese economic interests in India. In 2022, Indian authorities seized $725 million from Chinese smartphone company Xiaomi, accusing it of breaking the country’s foreign exchange laws by making illegal remittances abroad, a charge that the company denies. The seizure prompted Beijing to urge New Delhi to “provide a fair, just and nondiscriminatory business environment for Chinese companies”.

China and India are each other’s major trading partners, and together they are expected to account for nearly half of global growth this year, according to the International Monetary Fund’s estimate this week. Hopefully, the latest move by India to ease visa restrictions on Chinese technicians is not made out of expediency, but rather part of a long-term strategy that will see the country become more amenable to Chinese and other foreign businesses.

Editorial, China Daily