Portal to Ease Entry of Chinese Technicians Into India
Context:
A new portal has been launched to streamline the approval process for short-term business visas for Chinese technicians.
About the Portal:
- The portal, launched last week, is aimed at accelerating/streamlining visa issuance for Chinese technicians working in PLI sectors such as telecommunications, white goods, textiles, and pharmaceuticals.
- The new visa portal represents a practical solution to meet industry needs while ensuring regulatory control.
- By streamlining the entry of skilled foreign workers, India seeks to boost its manufacturing capabilities and support its economic growth goals.
Reasons for dependence on Chinese technicians:
- The domestic industry raised concerns about delays in fulfilling export orders due to issues with visa approvals for Chinese technicians.
- Companies importing machinery from China experienced production delays, which largely began following the Galwan clash in 2020.
- The industry depends on Chinese professionals because of its reliance on China for essential parts in most electrical and electronic segments.
- Official data indicates that nearly 60% of the $100 billion worth of imports from China are engineering and electronic items, which are crucial for meeting India’s export orders.
- Chinese technicians are sought after by Indian manufacturers as they are more affordable than technicians from other Western or even Southeast Asian countries.
- In absence of Chinese technicians several manufacturers are often forced to move manufacturing to alternative locations where there are no such restrictions e.g. Vietnam .
Chinese FDI in India:
Pre 2020:
- China has made significant inroads into India’s tech sector through venture investments and market penetration.
- Unable to involve India in its Belt and Road Initiative, China has invested about $4 billion in Indian start-ups, resulting in 18 of India’s 30 unicorns being Chinese-funded.
- Chinese apps like TikTok and smartphones like Xiaomi have captured substantial market share in India.
Reasons for Chinese Tech Depth in India:
Post 2020(Galwan clash):
Release of Press Note 3:
- The government also amended the FDI policy under Press Note 3 (PN3), bringing investments from China under the government route.
- Under the press note 3, applications will be considered on a case-to-case basis only.
- India has banned over 200 Chinese mobile apps like TikTok, WeChat, and Alibaba’s UC browser.
- The country has also rejected a major investment proposal from EV maker BYD.
- As of June last year, India approved only 25% of the 435 foreign direct investment applications from China since the Press Note 3 modification in April 2020.
- Despite this, China holds a minor 0.43% share of total FDI equity inflows into India, amounting to $2.45 billion.
Economic Survey 2023-24 on Chinese FDI:
Present status :
- China is exploring India’s auto market, focusing on electric mobility due to its expertise. As the fifth-largest global auto market, India is vital for both traditional and electric vehicles. Chinese firm BYD has introduced electric buses in India with limited success.
- In traditional autos, Chinese companies have invested $575 million, acquiring brands like Volvo and MG to compete with local and Asian automakers such as Suzuki, Hyundai, and Toyota.
- Although India has not engaged with the physical aspects of China’s Belt and Road Initiative, it has interacted with its virtual aspects, including Chinese products and standards.
- Earlier this year, the Competition Commission of India approved JSW Group’s acquisition of a 38% stake in MG Motor India, a subsidiary of Shanghai-based SAIC Moto.