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A portal to facilitate the approval of short-term business visas for Chinese technicians, essential for operationalising production units and boosting output in sectors under the government’s flagship Production Linked Incentive (PLI) scheme, has begun functioning, a senior government official said on Wednesday.
The Indian Express in June has reported that the domestic industry flagged concerns over delays in fulfilling export orders due to the hold-up in granting visas to Chinese technicians. Several companies had been importing machinery from China but faced production delays due to visa delays that primarily began after the Galwan clash in 2020.
“The portal started only last week. It is intended to streamline the process by which business visas will be granted to Chinese technicians in the PLI sector. The Ministry of Home Affairs (MHA) has held interactions with different departments to sensitise and train them on how the portal will be used,” the official said.
The industry relies on Chinese professionals due to its heavy dependence on China for crucial parts in most electrical and electronic segments. Official data shows that out of nearly $100 billion worth of imports from China, nearly 60 per cent comprised engineering and electronic items, which are also key to fulfilling India’s export orders.
Industry sources said that several manufacturers are often forced to move manufacturing to alternative locations where there are no such restrictions. They added that Chinese technicians are sought after by Indian manufacturers as they are more affordable than technicians from other Western or even Southeast Asian countries.
The border standoff after the Galwan clash in 2020 led to several government measures aimed at limiting Chinese influence on the Indian economy. The government also amended the FDI policy under Press Note 3 (PN3), bringing investments from land-bordering countries under the government route.
According to official figures, India approved only a quarter of the total 435 foreign direct investment applications from China up to June last year since the modification in Press Note 3 was introduced in April 2020. However, China contributes only a fraction of the total FDI equity inflows into the country. China stands at the 20th position with only a 0.43 per cent share or $2.45 billion in total FDI equity inflow reported in India from April 2000 to December 2021, as per the Commerce and Industry Ministry.
The Economic Survey last month advocated attracting investments from Chinese companies to boost exports. The Survey suggested this change in stance as countries such as Mexico, Vietnam, Taiwan, and Korea are benefiting from the China-plus-one phenomenon pursued by Western firms, with a simultaneous rise in investment from China.
“To boost Indian manufacturing and integrate India into the global supply chain, it is inevitable that India connects itself to China’s supply chain. Whether we do so by relying solely on imports or partially through Chinese investments is a choice that India has to make,” the Survey stated.
India faces two choices to benefit from the China-plus-one strategy: it can integrate into China’s supply chain or promote foreign direct investment (FDI) from China. Among these choices, focusing on FDI from China seems more promising for boosting India’s exports to the US, similar to how East Asian economies did in the past, the Survey emphasised.
