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

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.

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.

The investment clearances mark the first set of such approvals in recent years since the border tensions that resulted in stringent scrutiny of all Chinese investments. Now, Indian industry executives say the government is set to open the door wider to investment opportunities from Chinese firms.

“China is the factory of the world and this will continue for some time. We want to be self-reliant and move from assembly to manufacturing of components,” Vinod Sharma, chairman of the Confederation of Indian Industry’s national committee on electronics, told This Week in Asia.

“Towards that goal, there is a new policy being considered by [India’s Ministry of Electronics and Information Technology] to promote manufacture of components and sub-assemblies,” he added.

New Delhi is considering offering fiscal incentives to companies that can provide technical know-how, a move that is aimed at courting not only businesses from China but those from Taiwan, Korea and Japan as well since