Solving the China Puzzle

From app bans to joint ventures, the government has reset Chinese business in the country. The next step should be a structured model for sustainable engagement

- RISHI RAJ

THE PRIME MINISTER'S recent visit to China for the Shanghai Cooperation Organisation summit has brought renewed attention to India's approach towards business relations with its northern neighbour. Since then, several ministers have spoken in different ways suggesting the need to reassess ties, indicating a gradual shift from the restrictive stance taken after the 2020 border clashes. That episode, marked by the Galwan incident, had strengthened the government's resolve to curb Chinese investments.

The measures that followed were wide-ranging. Over 300 Chinese apps, including TikTok, were banned. More significantly, foreign direct investment rules were tightened through Press Note 3 which made it mandatory for companies from countries sharing a land border with India to seek prior approval before investing. The immediate impact was visible in the auto sector, where Great Wall Motor's proposed acquisition of General Motors' Talegaon plant had to be shelved, as approvals never came through. In parallel, Chinese vendors were barred from bidding for public projects without permission, and delays in visas for senior executives and engineers became routine.