NEW DELHI: A deadly border standoff between Indian and Chinese soldiers in June 2020 led to India restricting imports and imposing a blanket ban on Chinese investments.

It also implemented stricter customs checks and anti-dumping measures, allowing only essential items to be imported.

Naresh Gupta, who runs modular furniture manufacturer Aostaf Group, said he can now only bring in furniture parts which cannot be made locally.

Until a few years ago, half of all the raw materials needed to make furniture products came from China. That volume has been cut significantly in the past few years due to India’s current restrictions.

"We could make everything locally in India but… we will still need to get raw materials and the technology from China to prioritise making our goods here," said Gupta, who is also president of the Indo-China Chamber of Commerce.

Gupta said many Chinese companies will start investing in India if the government allows them to do so.

“But the government’s policies are such that they (must) wait in line for two years to get approvals,” he said.

He noted that the biggest problem is Chinese nationals struggling to obtain visas following the border clash.

Bloomberg reported last year that India issued just 2,000 visas to Chinese nationals in 2024 from about 200,000 before the pandemic in 2019, according to local media.

REPLACING IMPORTS WITH FOREIGN INVESTMENT

Analysts say Chinese investment would not just help small businesses but could also bolster India's large-scale manufacturing.

Jawaharlal Nehru University professor Swaran Singh said more Chinese manufacturing in India means that things that previously had to be imported can now be made locally with Indian input. 

“(It) makes India's exports competitive as well,” he added.

Chinese electronics giants Haier and Lenovo are reportedly looking at making products in India for export to the US, following tariffs imposed by US President Donald Trump’s administration.

They are hoping to capitalise on Trump’s decision on Wednesday (Apr 9) to