Can Indian industries be ‘self-reliant’ as Chinese investments return since border clash?

Critics warn increased investment could deepen India’s dependence on China, undermine Delhi’s efforts to grow innovation domestically

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An employee inspects the engine of a truck inside a factory in Oragadam in the Kancheepuram district of the southern Indian state of Tamil Nadu. Photo: Reuters

Published: 12:00pm, 29 Aug 2024

Investment from China is gradually flowing back into India four years after a deadly border clash between the two countries’ troops prompted New Delhi to impose stringent scrutiny on investments from its eastern neighbour.

Sections of Indian industry, particularly in electronics manufacturing, have been pushing for restrictions to be eased, but critics warn increased investment could deepen the country’s dependence on China and undermine New Delhi’s efforts to foster sustainable growth and innovation.

An Indian interministerial panel cleared as many as six investment proposals in the electronics manufacturing sector, including China-based firms as well as those with connections to China, according to a report from India’s leading business daily The Economic Times this month.

Among the prominent names that won approvals include Chinese electronics major and Apple vendor Luxshare, as well as a joint venture between India’s Bhagwati Products and Huaqin Technology.

Chinese state media in 2022 commemorated the second anniversary of the Galwan Valley clash with India. Photo: Weibo

Since the deadly 2020 border clashes in the Galwan Valley, in which 20 Indian soldiers and four Chinese troops died, India and China have been in a military stand-off at their shared border in eastern Ladakh. There have been some signs of tentative rapprochement between the two countries lately.