India is Severely Punishing China for its Ladakh Misadventure

India sanctions China

India takes firm decision against China over its Ladakh misadventure

India is severely punishing china for its Ladakh misadventure over the past three months or so. A plethora of decisions have been taken and all of them invariably target the Chinese economy. Even before the Ladakh military standoff started on may 5th, Modi government had started taking some firm decisions against china.

In April the Modi government altered the FDI policy and henceforth FDI (Foreign Direct Investment) from India’s neighboring countries including china is allowed only through the government route. The alteration was obviously aimed at checking predatory Chinese investments. Days later there were also reports about India imposing restrictions on Chinese foreign portfolio investments too.

Anti-China sentiment spiked after the Ladakh standoff

After the Ladakh standoff happened and military tensions soared between the two countries, a wave of anti-china sentiment took hold of India. Confederation of all India traders, which represents 7 crore traders and 40,000 trade associations, declared plans to boycott 3,000 Chinese products worth more than 1 lakh crore rupees (approximately 13 billion us dollars) by December 2021.

A national campaign called ‘Indian goods – our pride’ has been launched to boycott Chinese goods across the country from June 10 Click To Tweet

India is the 7th biggest importer of Chinese products and china enjoyed a trade surplus of 48.66 billion us dollars over India. The boycott calls in India threatened to close in on the huge deficit in the sino-india trade. India has also been watching over china’s attempts to route its goods into the country through third countries which have preferential trade agreements with India.

Beijing wants to escape higher duties but India has taken note of its economic misadventures. In fact India has also applied the country of origin rule on e-commerce. E-commerce players have agreed to display the country of origin for products sold on their portals. This enables Indian consumers to make an informed choice about the products that they want to buy as the Modi government prepares to reduce reliance on Chinese imports.

India takes lead on banning Chinese Apps. World follows !

Modi government’s blistering attack on China however came after the Galwan valley bloodshed. India decided to ban tick tock and 58 other popular Chinese apps. The decision kicked dozens of popular Chinese apps out of India’s growing internet market. Tick tock alone stands to lose 6 billion us dollars after the stringent ban imposed by India.

This wasn’t just a defense move but also a strategic maneuver by identifying Chinese apps as security threats. India has unleashed a wave of international outrage against china. Earlier this month the U.S secretary of state disclosed that Washington was considering banning tick tock and other Chinese apps.

South Korea too has imposed a hefty fine of 155,000 US dollars on tick tock for collecting personal information of underage users. Now India’s information and technology ministry has again swung into action. On Friday it banned 47 clones or variants of the 59 Chinese apps that were banned earlier.

India bids economic warfare against China

India punishes China
Representational image of Indian PM Narendra Modi and Chinese President Xi Jinping| Illustration: Soham Sen | ThePrint

The situation in Ladakh hasn’t witnessed complete disengagement and therefore Modi government’s economic warfare against China also shows no signs of abatement. In order to arrest Chinese investments in India the government plans on cancelling only those bids in which china is leading.

On Thursday the Modi government made it clear that the companies from nations that share a land border with India will be barred from participating in the government contracts for goods and services unless such companies register themselves with the industry department. According to the government of India, this decision has been taken to strengthen the defense of India and also national security.

The government order applies to both prospective tenders and those tenders which have been invited but not yet awarded. Of course the move was seen as aimed against china in the backdrop of heightened military tensions. Hindustan times has quoted two anonymous officials as clarifying that an ongoing tender process will be stalled only if one of the technically qualified bidders is a Chinese enterprise and such a bidder is also the lowest bidder.

The officials have also said that a clarificatory order has been issued to all state governments and public sector undertakings to scrap an ongoing tender process and initiate a new process only in case of the presence of a Chinese enterprise as a qualified bidder. According to the Hindustan times report one of the officials said, “in other words the tender should not be scrapped if it is unlikely to be awarded to a Chinese company.”

New Delhi is thus minimizing cost overruns and losses on its own side but inflicting the maximum possible damage on Chinese Communist Party (CCP) enterprises.

More Companies with ties to PLA and CCP fall under India’s Radar.

Meanwhile another 275 Chinese apps are also on the Modi government’s radar. It will be examined whether they pose a threat to national security and user privacy. According to the economic times, people familiar with this development say that this hints at growing concerns for security and the possibility of more Chinese apps getting banned. Big names like 10 cents, pubg and alibaba’s aliexpress are on New Delhi’s radar.

China deliberately created warlike situations in eastern ladakh and therefore India is taking extreme steps for the sake of national security. In fact at least seven Chinese companies including telecom giant huawei, commerce giant alibaba and tencent have been identified by the government over direct or indirect links with the Chinese people’s liberation army (PLA)

According to a source quoted by economic times, “what action would be taken is yet to be decided”. But India is once again setting precedent for the world by identifying companies with links to PLA as potential threats and an actionable ground in government policy. Some of the biggest names, many of them close to the Chinese communist party, are being relentlessly targeted.

Modi government’s actions against china are aimed at bolstering India’s security interests. It is also signaling to china that New Delhi reserves the right to advance its own security at the cost of the Chinese economy. In the process India is also going to escape dependence on Chinese products. Prime minister Modi is thus making sure that Beijing loses far more in reality than what it plans to gain by turning belligerent in the higher reaches of eastern Ladakh.

Recommend0 recommendationsPublished in India, China, Economy, World News

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