Xi Jinping’s India Visit May Warm Diplomacy, but Business Ties Still Face Major Barriers | Ukraine news

A long-awaited meeting could send a powerful signal, yet unresolved security concerns and delayed projects may expose how fragile the thaw remains.

Chinese President Xi Jinping’s visit to New Delhi this week, his first in seven years, could strengthen the diplomatic thaw between China and India. At the same time, there are still few signs of a rapid improvement in business ties between the two countries.

As informed by Reuters

Companies from both countries continue to face obstacles: investment projects are being delayed by regulatory restrictions, businesspeople are having difficulty obtaining visas, and supplies of industrial equipment are being restricted. This highlights the gap between diplomatic rapprochement and the state of economic relations.

Xi Jinping is expected to be in New Delhi for the BRICS summit. It remains unclear whether he will hold bilateral talks with Indian Prime Minister Narendra Modi. Such a conversation could determine the future direction of relations between the countries.

China and India went to war in 1962, after which mutual distrust persisted. Tensions escalated sharply following a 2020 border clash that killed 20 Indian and four Chinese soldiers. However, relations have gradually improved in recent years, particularly after Modi’s visit to China last year and amid both countries’ unstable relations with the United States.

China certainly wants to improve relations, but we expect to see how ready India itself is for that. Therefore, a major breakthrough is unlikely.

– Lin Minwang, a South Asia expert at Fudan University in Shanghai and a former diplomat at China’s embassy in New Delhi

According to Harsh Pant, vice president of the Observer Research Foundation think tank in New Delhi, a significant trust deficit remains between the countries.

China has significant economic weight and a good opportunity to use it to become a reliable partner, especially as both countries are affected by United States trade policy.

– Harsh Pant

Investment thaw remains limited

In March, India eased some of the restrictions on Chinese investment imposed after the 2020 border clashes. The changes applied to electronics, capital-goods manufacturing and solar cells. New Delhi is also considering faster approval of joint ventures between Indian and Chinese companies in certain sectors.

Indian authorities have already approved several major projects. Among them is the joint production of smartphones involving Indian company Dixon Technologies and Chinese manufacturer Vivo Mobile.

However, these steps have not been enough to bring major Chinese automakers BYD and Great Wall Motor back to India. According to an Indian government source, they suspended planned investments after New Delhi intensified its scrutiny. Both companies declined to comment.

Chinese companies are also facing additional scrutiny from Beijing. This applies in particular to sectors linked to high-tech manufacturing and advanced industrial technologies.

China’s Foreign Ministry said that Xi Jinping and Narendra Modi view the two countries as partners rather than competitors, and see each other as opportunities for development rather than threats.

Security concerns constrain cooperation

New Delhi rejected a proposal by Alipay, which is affiliated with the Chinese Ant Group, to connect to India’s instant-payment system. Indian authorities cited national security concerns.

The Indian government is also considering a recommendation from the Serious Fraud Investigation Office to investigate Chinese smartphone maker Xiaomi. The matter concerns possible violations in the company’s operations in India and noncompliance with foreign-investment laws. Xiaomi said it complies with all local laws and had not received any notification from the agency.

According to Indian sources, Chinese authorities have asked companies not to sell India critical technologies and equipment for infrastructure projects. The restrictions may include port equipment, solar panels and machinery for manufacturing mobile devices. China’s Ministry of Commerce did not comment on the information.

This year, Chinese customs officials held up equipment and components needed by India for solar energy, the electronics industry and infrastructure development. According to a government official, some large tunnel-boring machines for key Indian infrastructure projects have been delayed for more than a year.

Delays involving visas and equipment indicate more than administrative difficulties. They demonstrate China’s willingness to use India’s dependence on trade and technology as leverage.

– Ajay Srivastava, founder of the Global Trade Research Initiative think tank and a former Indian trade negotiator

Last year, China and India restored direct air links, while New Delhi simplified visa procedures for Chinese businesspeople. At the same time, some Indian entrepreneurs working with the Chinese market have recently encountered difficulties again when applying for visas.

China’s Foreign Ministry said visas are issued to Indian citizens who have a legitimate need to travel to China, in accordance with laws and regulations.

Leaders’ meeting could ease barriers

A face-to-face meeting between Narendra Modi and Xi Jinping could help remove some of the obstacles if the talks are successful.

Any meeting between the leaders of the two countries always creates an opportunity to better align political and economic interests. Of course, commercial ties are ultimately determined by the mutual economic interests of the people of both countries. However, bilateral talks can help create the conditions for these opportunities to be realized.

– Anup Wadhawan, a former senior official in India’s trade ministry

Thus, Xi Jinping’s visit could support the diplomatic rapprochement between China and India, but rebuilding trust in the business sphere will require longer-term and more concrete steps from both sides.