2024-06-27 00:15:39
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Thousands of Chinese engineers and technicians are struggling to get Indian visas, highlighting bottlenecks in the visa application process and potential obstacles to India’s bid to become a “China plus one” manufacturing powerhouse.
“The flow of talent, which is critical to the growth of the electronics industry, has stopped,” said Pankaj Mohindroo, president of the Indian Cellular and Electronics Association. He said that over the past two to three years, thousands of Chinese citizens’ business and employment visa applications have been rejected, and many others have not applied for “fear of rejection.”
In 2020, amid the coronavirus pandemic and a border clash in the Himalayas that killed at least 24 Indian and Chinese soldiers, India imposed Asia’s toughest restrictions on Chinese companies.
India’s ministries of external affairs and home affairs, which oversee visa issuance, have not responded to requests for comment on the reported visa backlog.
India has successfully attracted some multinational companies in industries such as electronics that want to diversify their supply chains and shift sales away from China, including Apple and its supplier Foxconn, which are building manufacturing capacity in southern India.
Global manufacturers in India, which in many cases rely on Chinese engineers and technicians to help install or run their factories, have run into conflict over India’s bearish policy toward Beijing.
“The current process is painful, creates uncertainty and hinders our aspirations to scale and add value,” Mohindroo told the Financial Times.
“Even Chinese citizens who have worked for these companies in the US for many years are facing challenges and mostly rejections,” he said. “This is not only hurting Chinese companies but mainly American, British, Taiwanese, Japanese and Indian companies that are building capabilities in India.”
Narendra Modi’s decade in power has championed a “Make in India” manufacturing push aimed at creating jobs and boosting exports, a move that dovetails with global companies looking for locations for factories outside of China in countries such as India and Vietnam.
However, Indian industry and government officials say India’s scrutiny of Chinese foreign direct investment and citizenship visas has slowed the shift in some cases.
Four years ago, the Modi government introduced a rule known as “Press Release No. 3”, requiring any foreign direct investment by companies in any country that India shares a land border with to obtain approval from the central government.
At the time, New Delhi said the rules were aimed at “curbing opportunistic acquisitions/takeovers of Indian companies.” Although the measure did not mention China specifically, it was widely believed in India that it was primarily aimed at Chinese companies.
Electric car maker BYD and Apple supplier Luxshare Precision are among mainland Chinese companies that have been denied permission to expand in the subcontinent, Indian government officials said.
Mohindroo said ICEA advocated for “automatic” government approval of companies where Chinese investors hold 49% stake.
China is set to overtake the US as India’s largest trading partner in 2023-24, but bilateral diplomatic ties remain cool due to an unresolved border dispute.
However, India has granted visas to some Chinese citizens to participate in projects under the Modi government’s production-linked incentive program, which provides billions of dollars in subsidies to boost manufacturing.
As part of the government’s plan, India is trying to promote investment in strategic industries such as technology and electronics.
Mohindroo said the fast-tracking of PLI-related visas was a “ray of hope.” Indian government officials said the backlog for these visas “has been reduced or almost disappeared.”
“We know China is the world’s factory,” said the person, who requested anonymity because he was not authorized to speak publicly. “We can’t give it up.”
Some Chinese companies have stepped up their presence in India by setting up joint ventures. For example, SAIC Motors announced in March a $1.5 billion partnership with steelmaker JSW to produce and sell MG-branded electric vehicles in the world’s third-largest auto market.
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