subject: Chinese Companies Made To Wait By Indian Government [print this page] The Indian Ministry of Commerce has been delaying the approval of Chinese investments in India reports Mint as in the case of Shanghai Electric, which has been waiting 18 months to establish a service center and other applications by Chinese companies in India with similar problems.
Certain prejudices against Chinese companies in India do exist because of security concerns, such as the ban on bidding for hydroelectric and telecoms projects in Indias border areas. However, in the case of Shanghai Electric, the issue appears to be unrelated to this and may be purely down to show Indian displeasure at recent Chinese tactics over its border disputes.
Top Indian companies have also been lobbying the government to limit the impact of Chinese competition and this is also true in the power generation industry. China has the technology and capacity to almost immediately begin work on numerous projects in India, and companies such as Dongfang Electric and Harbin Power have already signed letters of intent with Indian firms to provide equipment.
However, it has been noted that the Indian government has also received representation from Indian players to limit Chinese access to the Indian market.
Chris Devonshire-Ellis, managing partner of Dezan Shira & Associates in India, told 2point6billion: For entrepreneurial Chinese companies there does not seem to be a problem with getting license applications through and contracts signed. We have many successful instances over the past two years of Chinese companies setting up in India.
He adds: However, there does seem to be additional barriers that get placed in the way in India when Chinese state-owned firms want to establish operations here. Although the security aspect is recognized, not all of the Indian governments objections seem valid. Hopefully the government will start to see China as a strategic partner in terms of the power industry in particular, and the Chinese will be less vocal in their issues with border areas.
As it stands, politics is getting in the way of India-China bilateral trade and the sooner this can be cleared out of the way the better. With a reasonable approach to expectations there is no reason for bilateral trade not to continue to grow, and frankly, both countries need it, he adds further.
by: Dezan Shira & Associates
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