After a year of internal discussions, India intelligence agencies rightly barred Chinese investments in ports and handling thus rejecting 14 port construction and management projects valued at Rs. 61,000 crore (USD 13.26 billion) citing security threats.
Intelligence agencies including those from the Foreign, Defense, and Home Ministries ruled unanimously that permission to build and operate ports meant granting the Chinese default foothold in India enabling better intelligence gathering and snooping of defense and strategic installations. Moreover, some of the companies although held in third countries had Chinese ownership, strong relationships with Pakistan, and involved in the construction of the Gwadar port in the Straits of Hormuz at the mouth of the Suez Canal. Moreover, there is a pattern of involvement in building ports in South Asia; China is seriously engaged in building ports in Bangladesh and Myanmar and also developing indirect ownership links spanning Honk Kong and the Philippines. It is a combination of these moves coupled with others such as installation of a naval outpost in the Andaman Sea that is making analysts worried about
what China is up to.
Of course, Chinese companies complain bitterly and have enough
selfish Indian businesses and myopic columnists and editors who sympathize with these protestations. China Council for Promotion of International Trade secretary-general Wang Jinzhen says that “Some Chinese proposals have not been accepted in India for so-called security reasons although they were highly competitive in terms of price and quality.” Wang also says that several Chinese companies are eager to invest in India in a wide range of industries, but are discouraged by uncertainties about whether their proposals would be accepted. Citing the case of Huwawei, Wang says that the company’s proposal for a USD 60 million project is still not approved. An exasperated Wang questions the “security angle for a company putting up a bridge in an airport.”
For those who look beyond business the answers are evident. Firstly, The Chinese Government’s continued
overt support to Pakistan by their Government for military, diplomatic, infrastructural, and nuclear aid is not winning any confidence with strategic watchers in India. Secondly, the lack of transparency of ownership makes India suspicious on who really owns the company. Thirdly, contracts to build ports, bridges, and infrastructure brings the Chinese into the Indian heartland in direct contact and access to Indian facilities and installations; with the ownership angle unclear, India is worried that this is an elaborate ruse by China to gather intelligence. Fourthly, as seen from the Nathu La example, an access to Chinese traders to Indian consumers does not stop there—it can permeate to
handing over competitive advantage to markets in Bangladesh and Myanmar. Fifthly, there is unchecked
counterfeiting of Indian brands in China and those fake brands are competing with Indian brands and affecting Indian businesses.
Therefore, it is disingenuous to argue that India is restricting trade, business, and investment from China. It is China that is stopping better bilateral relations through hostile action.